Preamble

The House met at half-past Nine o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

Defence Industry

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Robert Ainsworth.]

Mr. Lindsay Hoyle: I am grateful for the opportunity to lead this debate.
I welcome the Secretary of State's determination to move to smart procurement. The major review carried out over the past few years made depressing reading and it is vital that the Ministry of Defence moves away from an inevitably confrontational relationship with the industry, which unalloyed competition policy brings. It should form a partnership with the industry, which would be wholly in line with the competitive procurement policies practised in industry.
One of the keys to smart procurement must be the early resolution of industrial policy issues and the adoption of a procurement approach based on partnership between customer and supplier. Three programmes where smart procurement could be applied beneficially are the five-year ammunition purchase programme, the future large aircraft programme and the beyond-visual-range air-to-air missile programme. In each case, the MOD is currently holding a competition, the outcome of which could have potentially fatal consequences for the UK's industrial capabilities. Several key decisions on procurement will be made in the near future, and I call on the Government to support British firms in those major contracts.
Chorley holds an historic position in defence. It is the home of Royal Ordnance, where 40,000 people were once employed. Today, the factory employs only a few hundred. Nearby are other major defence contractors employing many of my constituents. Warton is one of the UK's principal aerospace locations where the Tornado and the Eurofighter are designed and built. As Lord Gilbert, the Minister for Defence Procurement, recently confirmed to me, Leyland Trucks manufactures many of the Army's heavy and light trucks. I urge the Government to give that firm every opportunity to tender for contracts in the future. Those vehicles are quality British products made by a quality British work force with a proven history in Bosnia and the Gulf.
Aerospace and defence account for more than 20 per cent. of Lancashire's manufacturing industry. Many other firms have business in the defence industry. Examples from my constituency include NIS Precision Engineering, Xelflex and the Computer Science Corporation, based in Chorley and Preston.
I shall concentrate today on procurement policy. Procurement principles are simple: the Government must give value for money; nothing must stand in the way of quality and suitability for job requirements; and if there can be spin-offs in terms of jobs, investment and technology transfer, so much the better. Our service people are our most precious resource. If we ask them to risk their lives on our behalf, they must have the best equipment, from aircraft to the tool box. We must give them the protection that they deserve by giving them the best.
I was fortunate to lead a debate in the House on 9 July when I stressed the importance of the Eurofighter project. It is a quality product. It was designed and built by Britain and Europe, and it represents a massive investment by our aerospace sector, both civil and military. It has also given a major boost to the associated industries, such as design, engineering and computing. Without their skills, the project would not have gone ahead and we would not have the success that has put us at the cutting edge of technology.
For example, the Computer Science Corporation might not have been sited in Chorley, if not for the proximity of Warton. Its IT know-how will now be transferred to other areas of the local, regional and national economy.
Other aerospace projects, such as the Airbus, benefit from the technology transfer—for example, in aerodynamics, avionics and navigation systems. That is especially true of the transfer of the FLA, which is a military project with a spin-off for civil aviation. The FLA is a military aircraft which easily becomes a civil aircraft for moving large amounts of cargo around the world. That is a massive market. The FLA has had some problems, but that is natural; it is still at the design stage. The flight control, engines and radar of the Eurofighter are all performing well and could easily be transferred.
The importance of air superiority to any campaign has been proved time and again in the Gulf and in Bosnia. Eurofighter is much cheaper to buy than the American F22, and is only marginally less capable. I congratulate the Prime Minister, the Government and the Opposition on their support on this important subject—the House has united for the benefit of Eurofighter, which would give us the technology to compete with the Americans.
I am delighted that the German Government have finally agreed to the project, ending years of doubt and speculation. At last, we see the green light. I look forward to the signing of the agreement to construct the aircraft, and to seeing it into service. We all look forward to that.
Like the Eurofighter, the FLA represents the future of the aerospace industry and can be developed for the dual use that I mentioned. Like Eurofighter, it has incidental spin-offs such as technological and engineering advances, which benefit the country. Like Eurofighter, it seems to be continually shrouded in doubt and subjected to unwarranted criticism.
For example, I was told that the FLA was deficient, because it cannot carry a tank; nor, however, can the C130J. The C130J cannot carry a Warrior infantry fighting vehicle, which is a crucial element of our infantry support and is being used extensively in the former Yugoslavia. The C130J is an updated 1960s plane.
The only transport aircraft that is capable of carrying the tank is the C17, which has 50 per cent. more capacity than the FLA, but is three times more expensive to buy,


and four times more expensive to run. It cannot meet the European staff requirement in terms of operation from short, soft or rough airstrips.
Other FLA advantages include twice the tonnage per day of the C130J, and 20 per cent. more types of equipment. It is more flexible and can be produced in transport, tanker or maritime patrol variants. It has 100 per cent. greater cargo box volume, 70 per cent. higher average payload per sortie and 20 per cent. higher cruise speed. It could bring up to £5 billion into the United Kingdom economy.
Those are the crucial facts. The global military transport market is estimated to be worth £40 billion. The FLA is a quality European product which has served our services well and would also be a big money spinner for us. The five European partners will now work together to assemble a proposal to define the FLA's performance, capability and production time scale.
Critics of the FLA and the Eurofighter do not seem to understand that, or perhaps they have a financial interest in competitors of British firms. It should be borne in mind that the transfer of technology to the next generation of Airbus will be considerable. The FLA will give us that crucial next generation of civil aircraft for Airbus. I believe that Airbus military will be the way forward for Europe.

Mr. Alan Clark: I hesitate to interrupt the hon. Gentleman's very interesting dissertation. I agree with many of the compliments that he has paid the future large aircraft, but it cannot carry a main battle tank, can it?

Mr. Hoyle: I shall Help the right hon. Gentleman by repeating what I said. We know that the FLA cannot carry a main battle tank, but we are buying the C130J, which also cannot carry a main battle tank. The FLA can carry everything except the main battle tank, but, as we have noticed, the main battle tank is not needed by a fast reaction force. Unfortunately, the C130J cannot carry many tanks either, so we must make a choice. I believe that the decision lies with the FLA, because the C130J cannot carry the infantry Warrior, which is important.
The delivery date for the C130Js that the UK is buying has yet to be confirmed. Is it true that they are suffering from technical problems? Is it true that they are still awaiting a licence from the United States Government? According to press reports, the planes are 17 months late already. Is that correct?
Airbus has proved that it can make a quality product in the civil sector and that it is capable of the same for the military transport sector. As well as BAe, other firms such as Rolls-Royce and Shorts would be given a secure future.
The ASTOR programme will create several thousand jobs in the north-west—for example, at Raytheon Corporate Jets in Chester. More than 50 companies in the north-west would benefit from the ASTOR programme. In discussions with Raytheon, it seems that the Government have three options—Raytheon, Lockheed Martin or JSTARS, which is already in service with the US air force.
The original competition was between Raytheon and Lockheed Martin. JSTARS should be considered too big, too expensive to run and too old to be brought in. Recently, however, JSTARS was brought back into the competition, which I consider a retrograde step.
Defence firms hate such instability. They are spending millions of pounds on projects lasting many years and requiring the highest technological advances. If the Government are to run a competition, it must be a fair one with clear guidelines, which must be adhered to. There is too much at stake, and a quality product cannot be produced unless suppliers have the stability to develop and deliver it.
Will the Government consider changing the parameters, to ensure that they are clearly restated for the participating firms? Will the Government learn that if they change the parameters, there must be open and clear reasons for doing so? They must be up-front about that.
I shall now deal with munitions supplies. Chorley was once the home of Royal Ordnance, which has been making munitions there since the war. The headquarters remains at Chorley and there are a couple of hundred jobs on site. The ability to manufacture and supply armaments and munitions to our services is surely a key part of our defence procurement. To get rid of that, or to place it with another country, would threaten our ability to defend ourselves.
The previous Government have a lot to answer for. They closed plants throughout the country and left us in our present predicament of open tendering for munitions. Surely the provision of ammunition and the associated capabilities of propellant and high explosives are central to our strategic capabilities.
The responsibility lies with the Government and British Aerospace, as owners of Royal Ordnance, to preserve that capability. The Government should try to buy British first and foremost, rather than inviting tenders from other countries, even if they are allies or friendly states, such as the US, Germany, Italy, South Africa and Belgium.
BAe wants to move to a joint venture between Royal Ordnance and SNPE and GIAT Industries of France. That would effectively move production to France, and we would lose the capability to equip our own armed forces. Our armaments production would be based in central France. We would lose the high-explosive works at Bridgwater, on which we are dependent. To give up our own high explosives would be wrong, and would make us dependent on suppliers around the world.
We would depend on France for everything containing explosives—bombs, warheads, missile propellant and even some small arms and gun propellant. If we lose that capability, we shall never be able to regain it. It is easier to maintain a site on this island than on the European mainland, as history has shown, or as Belgium showed by not supplying arms in time of war.
The French always want to take the HQ of any joint venture to France, and especially to Paris. Most mergers with French firms tend to become takeovers, rather than partnerships. Competition in defence procurement that robs this country of key skills and strips us of a key strategic armament capability cannot be allowed to proceed.
The Government should immediately review their policy of competition in this area. British Aerospace must abandon plans to close the Royal Ordnance plant at Bridgwater. BAe is always ready to knock on the doors of Members and ask for support, yet it is threatening to close a BAe company. It cannot have it both ways. If it wants the support of the House, BAe must keep that plant open. Never mind the blackmail tactics; BAe ought to


be up-front, keep the plant open, and work with the Government, not against the Government when that suits it. BAe should learn that quickly.
How many other NATO countries have abandoned their munitions production capability? Not many—in fact, none that I know of. The local unions at Bridgwater have produced alternatives to BAe's current plans, which maintain viability and independence. The unions should be heeded. Will the Minister consider those plans seriously?
I believe that we all recognise the need for an aircraft carrier: 2010 will soon be upon us and we now have the chance to procure a 40,000-tonne aircraft carrier. That is where the future lies. However, it is crucial that we get it right: there is big money involved. We must produce the right class of carrier. There are many hot spots around the world and we will need to maintain a floating land mass from which to exercise our forces. Offshore protection is particularly important, and it can be provided by a huge floating land mass.
We also have an opportunity to develop a naval version of Eurofighter. We have a wonderful aircraft coming on stream and everyone is talking about joint-strike aircraft. What better time to develop for the next century a naval version of Eurofighter that can work from a big aircraft carrier? A 40-tonne carrier would give us the opportunity to begin a joint-strike fighter programme to meet future carrier-borne aircraft need. That is the direction in which we should move. I hope that the Government will consider my views.
I turn now to the beyond-visual-range air-to-air missile. The choice of the Matra BAe Meteor solution for the Royal Air Force's staff requirement Air 2039, the primary armament for Eurofighter, provides a European solution for that key requirement. It gives an opportunity to provide a common weapon across the Eurofighter nations and a further opportunity to drive forward the consolidation of the missile sector of the European aerospace and defence industry. Matra of BAe Dynamics has already formed a further relationship with Dasa's LFK subsidiary, and the adoption of Meteor will bring France, Germany, Sweden, Italy and Spain into the project.
During the 1996 missile campaign, BAe stressed that it was important for the company to win two or three competitions in order to retain critical mass in key technology areas. Only Storm Shadow was awarded, so Meteor remains vital to the future of the United Kingdom's missile capability and to the retention of long-term jobs at Stevenage and at Lostock, which is about one mile from my constituency.
Ammunition capability in the United Kingdom is dear to the House and to the hearts of all hon. Members. If nothing else, we shall at least generate discussion today about that topic. Procurement is about the future of our armed forces. They deserve the best, and we have a golden opportunity to provide that. Smart procurement by smart Ministers will be the answer.

Mr. Nigel Evans: Does the hon. Gentleman agree that it is strategically important to ensure that work on the Al Yamahma contract, EFA, the Tornado, Hawk and other aircraft production continues in and around my constituency? It is also important to retain research and development skills in that area in order to ensure that we secure alliances with other European countries in the future to produce aircraft such as the

European fighter aircraft. We must be able to look forward to whatever will replace EFA in 10, 15 or 20 years' time—we must remember that the EFA was 17 years in the making.
Does the hon. Gentleman agree that the Government must look now to maintaining Lancashire's existing defence manufacturing capability by ensuring that good orders are given to British companies with interest in the EFA and other defence aircraft, ships and munitions in the next 10 or 15 years? That will enable long-term planning by companies such as British Aerospace, and will secure the future of smaller companies that depend on the existence of those larger firms.

Mr. Hoyle: I welcome the hon. Member's remarks—and I welcome his conversion to Labour's procurement policy. I take on board his comments. We have the research facilities, the skills, and the development in the north-west: it would be madness to move it elsewhere. The Government are planning for the future. I am pleased that the hon. Gentleman supports that, and I look forward to his continuing support of the Government's policy. I cannot disagree with a word that the hon. Gentleman said.

Mr. Alan Clark: I commend the hon. Member for Chorley (Mr. Hoyle) for seeking an Adjournment debate on this important topic, and for the lucid and comprehensive way in which he set out his case. This topic must be approached from several different angles, and I caution the House against treating the defence industries in isolation as an engine of employment. The real importance of the defence industries is their high-technology and research qualities and that aspect of their function that keeps this country at the leading edge of the various technologies associated closely with the defence field. Maintaining those industries as consistent laboratories of research is just as important as retaining them simply as engines of employment, often making products that are either obsolete or obsolescent.
Before I go on, I must congratulate the hon. Gentleman on drawing the attention of the House to the fact that we are divesting ourselves of the capacity to make high explosives in this country. We must put that issue in an historic context and consider the events of the whole century—particularly some of the tremendous debates at the time of Lloyd George's Government, and, to a lesser extent, during the second world war, about the shell shortage and the need to produce bomb, missile and shell warheads. The very idea that, at the end of the century, the House of Commons should submit meekly to the fact that Britain is totally divesting itself of the capacity to make high explosives and delegating it to the French—of all people—is utterly incredible; it literally passes credibility. It is a commentary on the fact that fashion in opinion is everything; no one seems even to have noticed what is happening.
The defence industries are part of the whole defence policy structure which, if it is to be credible, must have input from the Foreign Office, which determines our long-term strategic objectives; from the Department of Trade and Industry, which is concerned about industrial capability and determines what capacities we must retain


at all costs in this country; and from the Ministry of Defence, which determines security requirements. The hon. Gentleman talked about buying British, and I endorse his remarks completely. However, one problem with competition and with foreign bids is that they never calculate the real costs—such as the costs of paying unemployment benefit in this country, the benefits of direct taxation levied on industrial activity in this country and so on. The costs are too net and they do not take on board the gross accounting. A responsible Government should consider those factors.
But it is no good buying British if the British are not producing what we need. Defence procurement projects develop their own momentum. Hon. Members on both sides of the House, such as the hon. Member for Chorley and my hon. Friend the Member for Ribble Valley (Mr. Evans), become greatly attached to such projects largely because of the employment implications for their constituencies. That is perfectly proper; it is how constituency Members of Parliament should respond to pressures. However, those pressures often become separated from the real consideration: the merit of the weapons involved.
As the hon. Gentleman and the Minister well know, MOD input in defence projects is driven by the Operational Requirements Committee, whose output has a very long gestation period. It comprises largely serving officers—who are often nearing the end of their careers and who are on secondment—and there is a perfunctory, and all too cursory, input from the chief scientific adviser. Broadly speaking, the Operational Requirements Committee conceives of weapons—it is a classic example of commitment to fight the next war with the weapons of the last war. The last war was the cold war, which we won—it was an almost bloodless victory. However, there is a huge time lag in which we become saddled with weapons that were conceived in a totally different context. At some point—I hope that this will be part of the review that the Secretary of State and his team are undertaking—there has to be a major strategic reappraisal of what our military function is meant to be.
As I understand it, the objective of the Foreign and Commonwealth Office is that our military capability should carry sufficient weight to merit our place on the Security Council of the United Nations, and, deriving from that, our place on the various other bodies that determine world policy, such as the Group of Seven, and so on. If we are to maintain this, our defence industries and our strategic posture will need a totally different configuration from that still being carried through, which is part of the old cold war configuration. I am in total agreement with the hon. Member for Chorley that, essentially, it has to be naval in its bias. If we are to justify our seat on the Security Council of the UN, we have to be able to take part as primary partners in any intervention or peacekeeping in distant waters, and for that it is essential that we have, for example, a fixed-wing carrier. We have to reconfigure the whole procurement strategy.
I have a series of tables that are absolutely terrifying. They show the amount that has been spent in the past eight years or so on major weapons products. Leaving out the unit costs of purchasing, more than £11 billion has been spent so far simply on aircraft and associated systems. The amount spent on the Navy and on naval

procurement is barely 15 per cent. of that. These are simply development costs and the very early stages of conception. The whole naval field has been completely neglected.
The House should remember that, at the time of our naval supremacy, when we really knew how to do it, and when there were a whole range of competing yards around the country, the building of the Dreadnought, which was the very first of its line—a completely revolutionary ship with turbine propulsion and heavy main armament—took exactly a year and a day from laying the keel to completion and commissioning. The tonnage was the same, and in many ways the throw power was the same, as a CVS carrier, whose replacement is a matter that the defence team now have to consider.
I hope that I can enlist the help of my hon. Friends and the hon. Gentleman to support a radical rethink by the Ministry of Defence about how we should restructure our strategic defence capability, and the direction in which we should focus our procurement. If some pain is caused—there may be job losses if we shift from one sector to another—the House has to accept it, providing that we retain at the backs of our minds always the need to keep certain capabilities in this country. I am particularly glad that the hon. Gentleman raised the extraordinary scandal of divesting ourselves of that very core element in our fighting capability—the ability to make high explosive.

Mr. John Hutton: I congratulate my hon. Friend the Member for Chorley (Mr. Hoyle) on initiating the debate. It is also a great pleasure to follow the right hon. Member for Kensington and Chelsea (Mr. Clark). Both my hon. Friend and the right hon. Gentleman spoke with a great deal of common sense.
I take much pleasure from the fact that there is an emerging consensus in the House about Britain's future defence requirements in terms of procurement and our longer-term strategic defence posture. I should point out to the right hon. Gentleman, who spoke very eloquently and with a great deal of knowledge, that, since the election of the Government on 1 May, we in this country are not suddenly divesting ourselves of our ability to procure ammunition. I am sad to say that it is a process for which the previous Government, in which he was a Minister, took a very significant responsibility. That leads me to make a wider point about procurement generally.
In shipbuilding, with which my constituency has a direct interest, the Government have inherited a pattern of defence procurement that worships dogma above common sense. Time after time, artificial competition exercises are manufactured between commercial entities to pursue what we believe to be value for money for the taxpayer. We all understand that value for the taxpayer is very important, but there are other ways of ensuring it than following a doctrine of artificial competition. The Ministry of Defence has evolved a sensible procedure to ensure value for money and state-of-the-art technology from the defence industry without the need to resort to artificial competition exercises.
I hope that the Minister will be able to say that the Government will explore seriously the benefit of widening the scope of the "no acceptable price, no contract"— NAPNOC—procedures. As the right hon. Member for Kensington and Chelsea rightly pointed out, in many areas


of the defence industry there is no effective competition, because of the restructuring of the industry. Hundreds of thousands of defence jobs have been lost in the industry since the early 1980s. If we constantly look to manufacture these competition exercises, we not only increase expenditure for the taxpayer but can delay important procurement decisions unnecessarily and end up with not very good value for money.
I am not saying that in some cases competition and a competitive tendering exercise are not important. I believe that they are. However, we should approach all the issues in defence procurement from the standpoint of common sense. I hope that, in some cases, common sense will lead us to conclude that, by developing the NAPNOC procedures—this particularly applies to shipbuilding—we can get better value for money and develop a more coherent relationship with the defence industry, which needs firm guidance from the Government about their long-term procurement requirements.
That is why I endorse the right hon. Gentleman's implicit welcome of the Government's strategic defence review, which will be important not only for putting our defence forces on to a proper basis to meet some of the very difficult threats and challenges that we will face in the next century, but will help the defence industry to wake up to the challenges. The review will require the defence industry to negotiate with the Government over a longer term, and with more certainty and confidence, about their future procurement requirements.
One lesson that we all learned in the 1980s and 1990s is that, with the best will in the world, it is impossible for the defence industry to survive on a diet of hot air and promises. People have to make things. As the right hon. Gentleman made clear, we cannot use the defence procurement budget simply to manufacture jobs. We all understand that. It has to be for a purpose.
Often, the attitude and stance of the previous Government made it very difficult for companies to plan over the long term, which is the basis on which all successful companies have to operate. The constantly changing agenda, delays in procurement and ineffective management of the budget all contributed to a very serious state of affairs for Britain's defence industries.
I also welcome my hon. Friend's surprising support for aircraft carriers. Although I had not expected him to mention them, I am delighted that he did. When we talk about Britain's future defence requirements, it is important that we recognise the central role of the Royal Navy. I also welcome what the right hon. Gentleman said about that. The figures that he quoted were significant. I used them in debates in the previous Parliament. Defence spending over the past 15 to 20 years has largely been at the expense of the Royal Navy, notwithstanding the rundown of the Trident programme. It is clear that the Royal Navy has borne the brunt of many of the reductions in defence spending in the past 15 to 20 years. That is a serious mistake.
I do not have any illusions of imperial grandeur, but I want Britain to pull its weight in the international community. We should support the United Nations properly and effectively when required. If we are to do that, we must have the ability to project force around the world, not threateningly—I am not arguing for that—but to support our international allies and to protect our allies around the world.
Amphibiosity is important. In my constituency, the first deal is now being cut for the new assault landing ships for the Royal Marines. That is a very welcome procurement. For amphibious forces to be effectively and safely deplored around the world, they will undeniably require aircraft protection. We will not always be able to rely on protection from land-based allies: we may be able to do so in some operations, but not in others. We would jeopardise the safety of any deployment if we proceeded without the effective provision of air cover. Some people may argue that our allies could provide that, and of course the United States navy has a significant carrier force. However, with the benefit of hindsight and prudence, it would be a mistake to assume that that cover will always be available.
That leads me to conclude that we should consider a replacement for Invincible class aircraft carriers. That is what my hon. Friend has concluded, and I hope that it is what other hon. Members will conclude. My hon. Friend referred to a carrier capable of carrying 40 aircraft. That is probably what we should be considering. The Invincible class, which carries a maximum of nine Harriers, is not really designed to perform a full air cover operation to protect amphibious landings. That is probably the most expensive decision that the Government will have to make as part of the strategic defence review: it is one of the key strategic challenges.
We can argue the toss about whether it should be a vertical, short take-off or more conventional, assisted take-off and landing aircraft carrier. Those operational considerations are largely secondary to the important strategic issue of whether we want British forces to be able to deploy safely and effectively around the world. I hope that my hon. Friend the Minister will explain the Government's view on those important issues.
I broadly welcome the Government's commitment to the establishment of a proper policy for defence diversification. We argued in the previous Parliament that the then Government had a special responsibility to the defence industry, given that they were essentially its only customer, and that they should give the industry practical help to cope with the significant downturn in defence spending.
That was not an appeal for an interventionist industrial policy based on some ancient dogma: far from it. It was a matter of common sense, because the defence industry was one of the few areas in which British companies had a leading edge, a technological advantage, a proven record of innovation, markets abroad and a reputation abroad that was second to none. I am afraid that there are few such sectors left in British industry. We felt that the defence industry was not properly supported and was not being allowed to make the necessary adjustments in an era of significant reductions in defence spending, which fell by a third under the previous Administration.
This Government's commitment to consult industries and others about the establishment of a defence diversification agency is welcome. I do not believe that it is a panacea, or that an agency on its own will be able fully to compensate for the job losses, because hundreds of thousands of jobs have been lost already due to the previous Administration's neglect. In my constituency, 10,000 jobs have been lost in the VSEL shipyard in Barrow-in-Furness since 1990.
However, evidence from successful practice in other countries shows that a defence diversification agency can help defence companies and others in a community affected by defence job losses to explore the best practical use of technology transfer initiatives. Some of the leading edge innovation in research and development that defence companies have undertaken can be transferred. We should explore the potential for commercial exploitation of those designs in the civil markets.
That will not be easy: I am not making false claims about what a defence diversification agency can do. However, it is completely unacceptable for a Government, who are the industry's only significant customer, to say to defence companies after years of an exclusive commercial relationship, "We're sorry, you're on your own now. We've decided to go elsewhere, and we're no longer interested in what happens to you." That is an unacceptable abdication of responsibility. I am delighted that this Government have broken with that neglect, and have taken a practical approach to diversification issues.
I made a plea earlier in this Parliament for a defence diversification agency to be based in my constituency. I know that the Minister will not be able to say anything about that matter today, but, with respect to my hon. Friend the Member for Chorley, my constituency is the most defence-dependent area in the United Kingdom. We look to the Government not only to make early progress on the establishment of an agency, but to give favourable consideration to putting it in my constituency.
With the strategic defence review, we have a unique opportunity to put the Government's relationship with the defence industry on a secure basis for the future. Clarity of objectives is crucial, so that we know exactly where the Government want to take us. The defence industry needs clarity and clear direction to be able to make the necessary plans for the future. The strategic defence review is overdue, and it is welcome in my constituency and elsewhere. I hope that the Minister will say a little more about the progress that is being made and about what we can expect from the review in the future.

Mr. John Greenway: I am grateful for the opportunity to say a few words on a constituency matter. I congratulate the hon. Member for Chorley (Mr. Hoyle) on securing the debate. Two points that he made stand out and fit very well with the comments that I want to make.
First, I agree with him that we should support British defence jobs. I also agree with my right hon. Friend the Member for Kensington and Chelsea (Mr. Clark) that that does not mean that we should buy equipment that is of no use to our armed forces. However, if the armed forces desperately need equipment, and there is a British product of the highest quality that is better than anything else in the world, we should seek to procure it. That is a wide-ranging issue. There is a wide definition of what constitutes defence equipment. It embraces the aircraft on which pilots in our armed forces learn how to fly. It may look like an aircraft that we could fly at Blackbushe airport, but it is military equipment.
The other point that the hon. Gentleman made was that air superiority has been paramount in recent armed conflicts, of which we have had experience. It is important

for us to have the best fighter and combat aircraft. I listened carefully to what the hon. Gentleman said about the European fighter aircraft: I have generally supported that project. It goes without saying that air superiority requires our pilots to have the best possible training. I have two interests in that. During my first 10 years in the House, the RAF base at Linton-on-Ouse was in my constituency. The initial jet pilot training for the Royal Air Force is now carried out there. Sadly, I lost Linton-on-Ouse to the Vale of York. None the less, I take this opportunity to pay tribute to the tremendous work that is done there. It is the only major flight training school that we have, so it is important that it continues.
About two or three years ago, I took a small aircraft manufacturer in my constituency, Slingsby Aviation, to see the then Minister of State for Defence Procurement, Mr. Roger Freeman. We put to him the proposition that it would make sense financially for the RAF to scrap the Bulldog aircraft, which is used by the University Air Squadron, when it came up for its midlife refit, and to replace it with the Firefly aircraft, which already serves 11 air forces throughout the world. In addition, our armed forces had already acquired about 17 and were about to acquire a further 25 for the joint elementary flight training scheme. We suggested that the Firefly was a better aircraft and that better value for money would be obtained if it replaced the Bulldog. I should add that it is manufactured by Slingsby Aviation in Kirkbymoorside in my constituency and that it has proved to be successful.
It is a matter of record that a review was undertaken, and a decision was made to scrap the Bulldog and to replace it with a new aircraft. However, as the hon. Members for Chorley and for Barrow and Furness (Mr. Hutton) have said, the system by which aircraft are procured is crazy. We go through this charade of competitive bids. The Ministry of Defence buys nothing. It asks a contractor to supply aircraft for so many flying hours. It does not say which aircraft it prefers and we get into a downward spiral of bids, underbids and further underbids: achieving best value for money for the taxpayer seems to be the only criteria that really matters. Perhaps I exaggerate, but the fact is that, a year ago, it looked as though a decision on which aircraft would replace the Bulldog would be made within a matter of months, and here we are a year later and no final decision has been taken.
As the Under-Secretary of State for Defence will know, the evidence that we are able to deduce from the confidential competitive bidding system is that two aircraft have been proposed by the two contractors who have bid for the contract. One is the Firefly and the other is a German aircraft manufactured by Grob, which is to use a factory that, I understand, currently has no work and is empty. There have been suggestions and innuendo that Grob has benefited from some hidden subsidy. I do not know. I do not make that allegation. I simply want to say this to the Under-Secretary of State for Defence.
Over the past year or so, the armed forces have taken delivery through FRA Serco Hunting of 25 Firefly 260 aircraft. They fly 90 sorties a day through the joint elementary flight training scheme and we understand that the aircraft is proving extremely reliable and an excellent elementary flight training aircraft for military pilots.

Mr. Gerald Howarth: Is my hon. Friend aware that, last Monday, I had the opportunity of flying


the aeroplane at Farnborough? As a former University Air Squadron pilot, I am the sort of chap who will be flying the Firefly. It is an extremely good aeroplane. It is not viceless, but it is important that an aeroplane that is used for elementary flight training should give the student pilot the opportunity to understand that an aeroplane can, in some circumstances, be vicious.

Mr. Greenway: I was aware of that and I am grateful to my hon. Friend and other Members for their support.
The aircraft speaks for itself. Our armed forces' experience of the aircraft suggests that there is no reason why it should not replace the Bulldog.

Mr. Hoyle: Does the hon. Gentleman agree that the RAF is also happy with the Firefly? It has a proven record in the United States and it will support British industry and jobs. That is why the Minister should support the aircraft.

Mr. Greenway: I am grateful to the hon. Gentleman for his support. He mentioned the fact that the United States air force bought more than 100 Fireflys five years ago, for which the company involved won the Queen's award for exports. There have been three fatalities involving the aircraft in the United States, but I understand that every one was due to a lack of proper training by the flight instructors at one air base in the United States. Where the flight instructors have been properly trained, the aircraft has proved entirely satisfactory, so no one should suggest that there is anything fundamentally wrong with the Firefly. It is proving to be an excellent aircraft in our armed forces.
There is also the jobs factor. Already Slingsby Aviation has had to lay off staff because of a lack of orders. This is a niche market. It stands to reason that air forces throughout the world will buy these aircraft only from time to time. As I have said, Slingsby Aviation has supplied to 11 other countries and there are potential orders in the middle east, but, not surprisingly, countries there are looking with interest to see what our Government do. If the RAF does not invest its confidence in the Firefly aircraft and place an order for the 60 that are needed through one of the two contractors, all under the private finance initiative, those countries are bound to ask: why should we? That is an important point.
I do not want to press the Under-Secretary of State for Defence too hard because Ministers both in the previous Government and in this Government have understood the job implications of the decision, but I want him to be in no doubt that, this week, Slingsby Aviation has announced a further 20 redundancies. If the decision is not in its favour, I guess that, within two months, a further 42 staff will be made redundant. That will mean that all the people that Slingsby Aviation needs to build the aircraft will have been sacked.
That is the key point that the hon. Member for Chorley made. We have to protect our capability. Whether it is in building and manufacturing armaments that are occasionally needed by our armed forces in conflicts throughout the world, or the basic equipment with which we train our pilots, the argument is precisely the same.
I hope that Ministers will take control of the situation and intervene. Let us have an early announcement in favour of Firefly because, if we do not, the factory,

which has built an aircraft that is in service throughout the world, including the United States of America, will close and the capability will be lost. And for what? We might save a few pounds in the initial contracts, but I suspect that, over 25 years, the alternative would prove more expensive, not least because the Firefly is compatible with the joint elementary flight training scheme: it is used for all the elementary pilots trained in this country. That surely speaks for itself. I urge the Under-Secretary of State for Defence to take note of what I have said and to make an early decision in favour of Slingsby Aviation.

Mr. Robert Key: I congratulate the hon. Member for Chorley (Mr. Hoyle) on seeking and on being successful in obtaining the debate, which is on an important sector of the British export industry. I note with care not only what he said about Royal Ordnance, but his wise words about keeping peace around the world.
It would help us to debate this whole issue more deeply if we could strip away the secrecy from the strategic defence review. For example, it would help if we could hear a little more about the foreign policy base lines because, until we do, we cannot begin to speculate on the future of amphibious capabilities, anti-submarine weapons, warfare tanks, regimental systems or anything else. I know that the Minister wants consensus and I dare say that that would be a very good thing, but we cannot go that far until we know what is going on in his mind. It is good to see him here again for another debate on this important issue. I am sorry that he could not fit in a visit to the IMDEX naval exhibition at Greenwich where many British shipbuilders were exhibiting—

The Parliamentary Under-Secretary of State for Defence (Mr. John Spellar): I must correct the hon. Gentleman. I did attend the exhibition and visited a number of stands.

Mr. Key: I am grateful for that information. Many people in the industry were not aware that the Minister had been there, and I was going to say that I know he has a tight schedule. I wanted to echo his colleagues who said that we must ensure that naval interests are not neglected. Thousands of companies which are members of the Defence Manufacturers Association and the Society of British Aerospace Companies keep hon. Members very well informed on these issues. They keep an eagle eye on what we do and say in the House, and rightly so.
Let us not forget that the industry is crucial, employing 415,000 people and generating more than £5.5 billion worth of exports. As my right hon. Friend the Member for Kensington and Chelsea (Mr. Clark) rightly said, we all have constituency interests in employment in defence, but that must not be the driving force. However, I pay tribute to the skills and experience of our world-beating British defence work force, to the scientists and engineers and to all the other staff behind them. It is easy to forget all those who make the industry tick, at whatever level they may serve. They have all created and assured the UK's dominant position in world markets. Their success is of direct benefit to the UK economy as a whole and to Britain's defence budget and defence capability.
What exactly is the Government's policy towards such a strategically and economically important section of British industry? I am concerned that there is a lacuna at


the moment. I noticed that a degree of complacency was beginning to creep into this excellent debate. We will not be doing the defence industry a favour if our speeches become nothing but self-congratulatory eulogies.
The Foreign Secretary announced in a blaze of publicity the existence of what he claims to be a new ethical foreign policy which would result in tougher guidelines on the export of defence equipment. I remind the House that the UK has had an ethical foreign policy for 50 years, since the United Kingdom signed up to article 51 of the United Nations charter—and for many years before that, for that matter. The Foreign Secretary's announcement was a relaunch, to put it charitably.
By October, however, the Foreign Secretary was being told by the Prime Minister to lay off arms sales. I welcome the fact that the Labour party is coming to understand the importance of defence exports, but are the Government going to offer any recompense to companies that have lost orders or had their reputations damaged as a result of the delay in the issuing of export licences? An industry survey last month repeatedly found that there were still enormous delays in the processing of open individual export licences, applications and renewals as a result of the
ludicrous over-bureaucratic requirements for end-user statements.
The situation has worsened noticeably in recent months, with desk officers rejecting end-user statements on grounds that the industry regards as farcical.
In case the Minister should think that I am a recent convert to these arguments, I must say that I am not. I have been pressing the issue for some time, including with my colleagues in the previous Government. I ask the Minister to consider what I said on 14 October 1996 in the debate on the defence estimates. I said:
Subject to the usual inspection and audit, and to severe penalties, there could be a self-licensing system for some exports. A grading system could be introduced in which grade A would involve the sale of non-offensive products to non-offensive countries, such as smoke grenades to Norway, Denmark or Canada; grade B would involve offensive products to non-offensive countries, such as high explosives to NATO countries; and grade C would embrace the sale of offensive products to special countries, which would require special treatment. In none of those cases would licences be granted to prohibited countries such as Iraq or Iran."—[Official Report, 14 October 1996; Vol. 282, c.5421
It is time for another look at the matter. The Department of Trade and Industry claims to have been examining it for years, but nothing ever seems to get as far as Ministers' desks—it is time that it did. I hope that the Government will implement the Defence Manufacturers Association's suggestion that a standard end-user form should be introduced.
I hope that the Minister will pass on this information to the Foreign Secretary who amazed us on 25 November when he said in the House that he was not aware of any delay in the processing of export licences. On 28 October, the Minister warmly offered a generous apology to the House and to me because he had not heard about the increasing delays in export licensing. I understand that things are getting better, and I am delighted to hear it. However, a month later the Foreign Secretary had still not heard about the delay, although we are told that there is a foreign policy-led review. I also hope that the Minister will be able to tell us that additional manpower has been deployed to support the export licensing process.
We do not believe that the defence diversification agency is as necessary as the Government think it is. If it is to have any hope of success, the Secretary of State for Defence and the President of the Board of Trade will have to collaborate much more closely than they have been doing. It is important that we know—I should be grateful if the Minister could let us in on this—whether the Department of Trade and Industry has had a significant input into the strategic defence review. Has it submitted proposals? If so, how will they affect the defence industry.
It is tremendously important that we do not erode the defence science base in this country. I understand the concern felt by hon. Members of all parties who appreciate the need for the greatest technology to be moved into the civil sector as well the defence sector, but we must remember why that science and technology has been developed in the first place.
Our defence industry is being forced by the Government to ride out a period of unprecedented uncertainty. It started on 1 May and will not end until the Government reveal the results of the strategic defence review. In a written answer on 10 July, the Minister of State for the Armed Forces stated that
procurement plans will …be considered as part of the Review, including projects already on contract."—[Official Report, 10 July 1997; Vol. 297, c.531.]
Where does that leave the companies that are considering laying down expensive production equipment? Are they to go ahead and see their project cancelled, or wait, and thus delay the in-service date of essential equipment which, as we know, is one of the major nightmares of the industry? Does the Minister believe that the payment of cancellation costs is an appropriate use of taxpayers' money? Would those cancellation costs come out of the defence budget or out of the contingency reserve of the Treasury? These are the questions being asked by the industry.
In addition, defence companies, like British industry as a whole, are labouring under the difficulties caused by the Chancellor's mishandling of the economy. The strong pound and rising interest rates make British exports more expensive to foreign purchasers, and our competitors reap the benefits. The changes announced to company taxation by the Chancellor in his pre-Budget statement last week also had a detrimental effect on financial planning and project management in the defence industry.
During the change-over period in the method of payment of corporation tax, British industry will have to pay £2 billion more in taxation. Defence companies in particular have long lead times on projects and large capital expenditure on equipment, an investment which in some cases is not repaid for a decade or more.
The Chancellor has shown what he thinks of the defence industry by switching funds from defence and nuclear programmes to other Labour ideological idols—all this before even stage 1 of the strategic defence review has been published. The Secretary of State for Defence has capitulated to the Treasury by admitting that
we cannot realistically expect more funds for defence".
That leads one to question why the Government are holding a defence review at all if they have already decided that defence will not benefit from the comprehensive spending review.
The Minister without Portfolio said on "Question Time" recently that while the Government would stick to Conservative spending plans, they would be moving funds


from Department to Department—perhaps from vital national security programmes to his dome. Bearing in mind the fact that the Chancellor has already shown that defence is not one of his priorities, should we expect the Government to continue raiding the defence budget, as they did recently under the guise of a "fine" to pay for the Chancellor's 10p tax band? We then had "smart procurement", which I fear is another soundbite policy. I do hope, however, that the newly created National Defence Industries Council will facilitate new dialogue and not merely be another talking shop.
I realise that the important element of the new policy is to encourage further European collaboration on defence projects. Conservative Members fully support policies that will lead to more cost-effective defence products, but I am concerned that such a policy could result in a "buy European at any cost" policy and the erection of a fortress Europe in defence procurement. Have the Government taken note of the comments made by Terry Dambusch, the United States ambassador to the Netherlands, at a recent defence exhibition there? He expressed concern that the formation of a western European armaments organisation and the Organisme Conjoint de Co-opération en matiere d' Armamént signal the beginnings of projectionist national preference rules.
The result of such a policy would surely be to encourage isolationist sentiment on Capitol hill and damage attempts by United States companies, such as Lockheed Martin—a company with much investment in this country—to ease the American military's policy of buy American. A transatlantic defence trade war would put at risk international defence procurement partnerships, and it would result in higher prices for military equipment world wide and a lack of UK access to US technology.
We should therefore strive to include rather than exclude United States defence companies from the European defence market, especially when the United Kingdom is trying to become involved with the joint strike fighter project.
We should always try to involve potential partners at an early stage in the development cycle. International co-operation can be successful only if it is begun at the developmental phase. Too often, co-operation begun after that phase will generally result, as all hon. Members know, in a product that is delayed, expensive and unable to meet all operational requirements.
As we end this year, I look forward to the Government ending uncertainty in the defence industry by drawing their strategic defence review to a rapid conclusion and by promoting genuine international co-operation within that global industry. The United Kingdom defence industry is a great one. There is great support for it on both sides of the House, and I look forward to many more debates on the subject. The time is coming, however, when the Government will have to give some answers.

The Parliamentary Under-Secretary of State for Defence (Mr. John Spellar): I congratulate my hon. Friend the Member for Chorley (Mr. Hoyle) on securing this debate and on his vigorously presented case on behalf of the defence industry and its employees, especially those involved in the Eurofighter and future large aircraft programmes and the aerospace industry.
As the United Kingdom industry's biggest single customer, my Department is acutely aware of how important our decisions are to our suppliers. As the right

hon. Member for Kensington and Chelsea (Mr. Clark) rightly pointed out, the prime responsibility of the Ministry of Defence is to obtain equipment that is fit for its purpose at a proper price and is suitable for the operations of our armed forces. We must also be mindful, however, of the impact on industry and of industry's future ability to supply our forces. It is for that reason that we have instigated the widest possible consultation process with defence industry employers and trade unions, ensuring that they are fully aware of our needs, and we of theirs.
We are similarly very conscious of the fact that the British defence industry has to operate and be competitive in a contracting international marketplace, which is now dominated by vast American defence conglomerates.
Let us, however, be clear about the matter. Despite the reductions that the industry has faced, defence is still very big business. Nationally, the defence industry involves 11,000 companies that employ well over 400,000 people, which is 10 per cent. of the UK's industrial manufacturing work force. The industry exports some 30 per cent. of its total output. In 1996, it won more than 25 per cent. of the world market for defence orders, which was second only to the United States. That is a proud record of British achievement.
I very much took on board the points made by the hon. Member for Salisbury (Mr. Key) and welcome his comments about improvements in the licensing system. The Government certainly understand companies' concerns. As my hon. Friend the Minister for Small Firms, Trade and Industry outlined in her written answer of 25 November 1997, every effort is being made to reduce the processing time involved in considering export licence applications. We are not being complacent about the matter, and we are in regular contact with industry to ensure that further progress is made and that British industry is not disadvantaged.
In the north-west, as my hon. Friend the Member for Chorley keeps reminding me, the defence industry is extremely important. It supports directly or indirectly about 70,000 manufacturing jobs, involving an estimated 600 companies. Although we rightly acknowledge the importance of prime contractors such as British Aerospace, with its major presence in the north-west, we must also stress the key role of the many subcontractors, many of whom are world leaders in their field.
Nevertheless, the big contracts are also extremely important. Like my hon. Friend the Member for Chorley, I am delighted that, last week, the German Bundestag approved funding for Eurofighter production. The project will, of course, be an immense benefit to the UK defence industry, particularly in the north-west.

Mr. David Borrow: I very much welcome confirmation of the Eurofighter order. I wonder, however, whether my hon. Friend the Minister will be prepared to make a few comments about the links between the civil and military sides of much of the defence industry? In my constituency, for example, Leyland trucks—which is perceived as a civil manufacturer—produces military trucks and is partly dependent on defence orders. In British Aerospace, the links between the civil side—for example, vis-à-vis Airbus and the FLA—and the military side are also very important. Decisions made by the Ministry of Defence therefore have


important consequences for non-military industry. Those links, and the links between the MOD and the DTI should be emphasised in this debate.

Mr. Spellar: I thank my hon. Friend not only for his intervention but for the strong interest that he has taken in the subject since being elected to the House and for the strong way in which he has championed the industry. He is absolutely right that maintenance of the industrial base and supply chain and the interaction between the civil and military sides of many of those companies is an important feature of the defence industry. We are mindful of that feature, and we certainly take it into account in our deliberations—not least those on the strategic defence review.
In the more general context of the SDR, the House will be aware that, in May, my right hon. Friend the Secretary of State announced that we would be implementing an SDR—the major reappraisal mentioned by the right hon. Member for Kensington and Chelsea. I tell the hon. Member for Salisbury that, in the past few months, the Secretary of State has made keynote addresses—not least that at the Royal United Services Institute—that have clearly indicated the directions in which policy is going. I think that most hon. Members have welcomed such indications.
I hope that my hon. Friends are in no doubt about the importance that the Government attach, in the context of the strategic defence review, to improvements to our procurement processes.
In the defence policy debate, on 28 October 1997, I listed the goal of the smart procurement element of the review. We want faster, cheaper and better defence procurement through development of a range of modern, streamlined procurement techniques. Achieving our goal will allow us not only to keep up with technology but to work in a more integrated way with industry, to meet the requirements of modern armed forces.
As our work has proceeded, it has become very clear that we have to take a wide-ranging view of defence procurement. Procurement is not only about the way in which contracts are placed, but about the way in which requirements for equipment are drawn up, the way in which technology is harnessed, and the way in which the problems of maintaining equipment during its life are addressed.
We are examining how the MOD's procurement policies work, and 1 very much take on board the point made by the right hon. Member for Kensington and Chelsea about the need for interaction with the operational requirements side of the business. We must also, however, specifically tie in our policies with the part that industry has to play. A vital component of that work will be to re-examine the way in which the MOD and industry can work together to secure value for money and to ensure timely delivery of world-class equipment for our armed forces.
On 13 November 1997, my right hon. Friend the Secretary of State announced a further extension of that work, to examine more fundamentally the organisational structures supporting the totality of the procurement cycle, in which we are again working closely with industry. I take the point made by the hon. Member for Salisbury

about the active role played by the National Defence Industries Council in the process. We will examine the smart procurement partnership—a section of the review that I am overseeing. That is further proof, if any were needed, of our recognition, in government as well as in opposition, of the benefits to the UK of a strong, capable and competitive defence industry. Ours is a commitment to deliver measurable improvements to our procurement performance and value for money to the customer, the armed forces and the taxpayer.
The key theme that is emerging is that, without in any way relaxing the necessary, tight commercial discipline of the relationship between the MOD and industry, there is a need to work together in a more systematic and integrated fashion. We need to see ourselves as partners, each with a stake in undertaking procurement better. The work that we have put in place will examine not only the roles that all relevant parts of the MOD play but the contribution that industry can make. I take the points made by my hon. Friend the Member for Barrow and Furness (Mr. Hutton) in that respect. It is essential that full account is taken of best practice across the international scene in industry and other procurement organisations.
This new and constructive relationship marks a step change in the way in which the MOD and industry work together, and will make an important contribution to tackling our procurement problems. As hon. Members have mentioned, it will enable industry to plan better on the basis of a more transparent approach and make a more long-term response.
Industry, for its part, has stated that, on the basis of such an approach, it can deliver considerable improvements in the cost of projects, especially in that vexed problem of the time scale required for bringing equipment into service. We shall work together to achieve the means of putting that commitment into practice. It is an ambitious agenda, but it underlines our determination to tackle hard problems in the strategic defence review.
I turn to industrial restructuring, which is in many ways at the heart of this debate. When winding up the defence policy debate on 28 October, I said:
On the future of the UK defence industry in the global marketplace, one of the policy principles underpinning the strategic defence review is the Government's commitment—previously made in opposition—to a strong, capable and competitive UK defence industry."—[Official Report, 28 October 1997; Vol. 299, c. 806.]
A strong and capable defence industry is very important to the nation and our economy. Not only does it help to meet the nation's defence needs, but it employs hundreds of thousands of people, has a healthy trade surplus, as I have mentioned, and provides the sort of highly skilled, high-technology jobs that we want to encourage and which are the key to the Government's commitment to rebuild Britain's manufacturing base. The industry also has a commendable record of training at all levels.
We must widen the focus of the debate to consider the defence market in a broader context than just the United Kingdom. That has to an extent been forced on us by the creation in the United States of the defence giants, Lockheed Martin, Boeing, McDonnell Douglas and Raytheon Hughes. It is also a natural progression, as collaborative projects become much more common and technological demands of such projects increase. Europe needs internationally competitive companies to enable us to compete and collaborate with the American giants.
The Government have a legitimate interest in the future of the defence industry. As its principal customers, the decisions that we make inevitably have a considerable impact in shaping the marketplace in which the industries and companies operate. The failure to acknowledge that was one of the core weaknesses of the previous Administration's procurement policy.
We also recognise the evolution in the industry and the need to diversify. That was strongly brought out by my hon. Friend the Member for Barrow and Furness, who went on to bid for the headquarters of the defence diversification agency to be sited in his constituency. I shall put that bid with the considerable number of others that I have received on each occasion that I have spoken about the agency. My hon. Friend made a strong point about Barrow's commitment to the defence industry and its strong reliance on it.
We said on diversification in our manifesto:
We support a strong UK defence industry, which is a strategic part of our industrial base as well as our defence effort. We believe that part of its expertise can be extended to civilian use through a defence diversification agency.
In meeting the needs of our armed forces, the MOD has made a substantial and significant investment in advanced technology. The hon. Member for Aldershot (Mr. Howarth) represents a considerable number of personnel who have been involved in such investment through the Defence Evaluation and Research Agency.

Mr. Gerald Howarth: I thank the Minister for his comments. In considering the diversification agency, will he acknowledge that the Defence Evaluation and Research Agency is already very conscious that it is the possessor of much valuable technology that has application in the civilian field and that it is working extremely hard and producing results? In a sense, would not the defence diversification agency replicate what the DERA is already doing?

Mr. Spellar: I do not wish to pre-empt the outcome of the Green Paper on the defence diversification agency. The hon. Gentleman will know that we have already acknowledged the considerable role played by DERA and our intention to build in best practice in our application of the defence diversification agency. This is about applying the fruits of investment and technology in the civil sector of the industry, spreading the technological processes and skills that have been developed for defence into new civil markets, which can strengthen the industrial base—and, indeed, the defence industrial base—as well as contribute to Britain' s improved economic performance.
The Government are obviously alert to the problems associated with broader restructuring. We want the process of restructuring to continue. After all, as my right hon. Friend the Secretary of State has said:
Europe's defence industry must rationalise or die.
The shape of any restructured industry is a commercial decision for companies, but the role that the Government can and will play is to establish the necessary international framework and agreements to facilitate change. We can and will continue to establish a clear policy framework in which industry can make sensible decisions on how to restructure.
As my hon. Friend the Member for Chorley is aware, collaboration between nations on major procurement projects, such as Eurofighter and the future large aircraft,

will become increasingly important. In future, and in order to facilitate such collaborative projects, OCCAR—I am delighted that the hon. Member for Salisbury (Mr. Key) pronounced it in full, which spares me from doing so—the four-nation armament structure created by France, Germany, Italy and the UK, will offer a real opportunity to realise the long-term benefits of collaborative projects through improved management. We look forward to the excellent work that it will be undertaking.
Obviously and rightly, due to the interests in the north-west, my hon. Friend the Member for Chorley stressed the position on Eurofighter. The Government remain firmly committed to the Eurofighter programme and have made that position clear on a number of occasions in the House and elsewhere both before and since the election. I certainly recall the Adjournment debate that my hon. Friend secured in July, in which we said that Eurofighter would form the primary component of the RAF's fighting capability. We are all pleased to have heard the good news from Bonn last week that the Bundestag voted for the eurofighter programme. That positive development means that Germany is committed to future phases of the programme. We are now consulting our colleagues in Germany, Italy and Spain with the aim of signing the intergovernmental arrangements known as the memoranda of understanding for the production and in-service support phases of the programme.
My hon. Friend the Member for Chorley mentioned the future large aircraft. As he knows, the Secretary of State announced on 31 July that we would join our partners in issuing a "request for proposals" to Airbus military company for the future large aircraft. Although the Airbus military company has not yet been formally incorporated, the request for proposals was issued on a provisional basis to the potential partner companies on 4 September. I should however stress that neither the UK nor any of its partners is at this stage committed to a purchase. Indeed, our decision in July made clear the need to maintain competitive pressures in order to ensure best value for money. The companies involved—Airbus and British Aerospace, which are world class and regularly compete successfully in the civil market—have a clear opportunity with the FLA to show that they can develop a world-class contender for the military market.
The hon. Member for Ryedale (Mr. Greenway) mentioned the Bulldog replacement programme. He rightly pointed out that we are not buying new aircraft and plan instead to buy flying hours from a contractor. The contractor will provide the aircraft and be entirely responsible for maintenance and a range of other support services. As the hon. Member rightly said, the aircraft being considered are two variants of the Slingsby Aviation Firefly and the German Grob. The Firefly is a good aircraft. Slingsby Aviation has exported it to several countries, including the United States. The Ministry of Defence is strongly supporting those export efforts. The RAF is familiar with the Firefly, which is used by the joint elementary flying training squadron. The final decision has not yet been made, but I assure my hon. Friend the Member for Chorley that the points that he has raised will be taken into account. I shall have to write to hon. Members about the points that have been raised about Royal Ordnance. Those considerations are part of our deliberations.
I assure my hon. Friend and the House that the Government are committed to a strong, capable defence industry. Tomorrow's defence industry will be different from today's, but we are convinced that our world-class industries and their employees will be equal to the changes that they face. The Government will be backing them.

Inward Investment Policy

11 am

Mr. Alex Salmond: This subject covers a wide canvas. I shall concentrate on the real concerns of many people in Scotland that the Government's plans amount to the sabotage of the most effective inward investment agency in Europe. They are a betrayal of the spirit of the devolution process. I hope that that is an unwitting move by the Department of Trade and Industry. Perhaps the Minister will be able to put at rest some of our real concerns about the trend of events and the Department's plans on inward investment.
The starting point should be the existing arrangements. Some remarks on inward investment in recent months have suggested that there are no arrangements to cover competitive inward investment across the United Kingdom. That is not the case. Rules are in place to prevent the poaching of jobs from one nation or region of the UK and moving them to another. If an inward investor does not have a preferred site in the UK, the industrial development unit in the Department of Trade and Industry reviews the case and sets the level of regional selective assistance available for whatever part of the UK becomes the preferred site.

Mr. Michael Fallon: rose—

Mr. Salmond: I should like to develop my points before I give way. I shall be fascinated to hear the Conservative party's position on this, as it seems to be going through a phase of development. The hon. Gentleman will have a chance later.
The only flexibility available to local bodies is in the package of site preparation, training and after care. There are European Union limits on the total value of any inward investment package offered. If those rules are broken, as has been alleged, the Treasury and the National Audit Office have the power to investigate, to monitor abuses and to do something about it. My first question for the Minister is whether she believes that the present rules are not working. If she does, what evidence is there and what have the Government done about those supposed breaches?
If an inward investor has no other preferred sites, the local agency, such as Locate in Scotland, acts directly with that investor, with the approval of the Government. There are strict financial limits to ensure that excessive grant packages are not offered.
I shall quote several authorities on the issue to show the range of concern in Scotland. The first is Neil Hood, a former director of Locate in Scotland. He pointed out the current situation in The Herald on 20 November:
In effect the distinctive competence of bodies such as Locate in Scotland is less in differential financial assistance than in customer care and attention; effective co-ordination of resources; and high levels of after care for existing investors whose expansion projects now account for some 60 per cent. of total inward investment.
There is a concern that the concordat will restrict the independence and the ability of Locate in Scotland to do its job. What is wrong with the existing arrangements? Allegations have been made against Locate in Scotland by Sir George Russell, chairman of the Northern Development Company, also known as the chairman of Camelot, who was appointed by the Tories in 1995.


Sir George has accused Locate in Scotland of attempting to poach Interconnections Systems from Tyneside, saying that it was offered large sums to move its head office and other operations to Scotland.
The Minister for Education and Industry, Scottish Office, who is present today, has denied the allegations and described them as "black propaganda" and has published transcripts of the dealings with the company to set the record straight. The second question for the Minister is whether she accepts her colleague's version of events or the version put forward by Sir George Russell.
There seemed to be a large streak of envy running through Sir George's evidence to the Trade and Industry Select Committee. Perhaps Sir George should understand that inward investment is not a lottery. It is a reward for those with the techniques and ability to seek out investors and to do the job properly. There is no licence to print money. Inward investment is a competitive environment, unlike the monopoly that Camelot enjoys. If the Scottish Office is correct in saying that Sir George's allegations are no more than "black propaganda", why has he, as a public official, not been censored by the Government? Why has he not been brought to book? Has the Minister had any conversations with Sir George, in the light of his evidence to the Select Committee, to ask him to mend his ways and not make unsubstantiated allegations against other inward investment agencies?
Other unsubstantiated allegations have been made. Given that Locate in Scotland attracts 20 per cent. of the investment coming into the United Kingdom, we must ask whether the allegations represent envy of Locate in Scotland's success and its ability to produce packages to encourage investment. Would it not be better if those in the various agencies in the north of England examined how to build organisations in their area with the same expertise and ability as Locate in Scotland? Government thinking appears to be to drag down Locate in Scotland's ability, autonomy and success.
I should like to examine the arrangements in the concordat between the Department of Trade and Industry and the Scottish executive and its Welsh equivalent. I do not understand how a concordat, which was suggested in the devolution White Paper, can come into place before the Scottish Parliament and the Welsh Assembly. The bodies involved have to come into being before the arrangements can be agreed. If the arrangement is to be imposed on the Scottish Parliament and the Welsh Assembly, it is not a concordat, but a diktat. There cannot be negotiations to produce an agreement before one of the parties to that agreement exists. My third question is how it can be in the spirit of the devolution White Paper to have an arrangement between the Scottish Parliament, the Welsh Assembly and the DTI before the bodies have come into existence. Is there not a risk of the concordat neutering the effectiveness of Locate in Scotland?

Mr. Norman A. Godman: The people of the west of Scotland want to ensure that the autonomy of Locate in Scotland is not diminished. I remind the hon. Gentleman that my constituency has benefited enormously from inward investment. The two biggest employers are National Semiconductors and IBM. The latter came to Greenock through the exertions of the Labour Member of Parliament, Hector McNeil.

Mr. Salmond: I appreciate the hon. Gentleman's concern. It might be argued that my constituency is less

directly concerned, because it depends, not so much on inward investment, as on resource-based industries, such as oil and fishing. However, in many constituencies in Scotland, inward investment is a very important part of the economic structure. I am sure that the hon. Gentleman will also be concerned when he reads the concordat, two sections of which—10 and 12—cause me great concern about whether the autonomy and success of Locate in Scotland in his constituency and elsewhere can be repeated.
Section 10 of the concordat reads:
national co-ordination of the promotion of the UK to foreign investors will be maintained and will continue to' be the responsibility of the UK Government.
Is that really in the spirit of the devolution White Paper? It stated that
inward investment including the functions of Locate in Scotland
was a devolved matter for the Parliament to legislate on. There seems to be a direct contradiction between whether the United Kingdom will be marketed internationally as a single entity, presumably by the Invest in Britain bureau, and whether the ability of Locate in Scotland to identify specific investments and attract them to Scotland will be maintained.
Perhaps even more seriously, section 12 of the concordat seems to introduce binding cash limits across the United Kingdom, extending the present controls from regional selective assistance to include all elements of the financial package on offer, including site preparation, training deals and after care—in which Locate in Scotland specialises and is the reason for much of its success. Will that not undercut Locate in Scotland's ability to act as a one-stop agency in negotiations with inward investors? The concordat states:
There will be common financial limits covering major schemes of financial assistance to companies administered directly by the UK Government".
Crucially, it states that those limits apply to
the total of public sector assistance.
I intend to place a copy of the concordat in the Library, because it would be helpful if all hon. Members, from Scottish constituencies and elsewhere, could see the terms of the negotiations apparently taking place between the Department of Trade and Industry and the Scottish Office.
Alf Young is probably the most respected industrial journalist in Scotland. He has followed the activities of Locate in Scotland from its birth in 1981 and charted its success—not always uncritically, because he is no mere cheerleader for the agency. His bona fides as an expert commentator would be accepted. Therefore, when he describes the arrangements, as he did in The Herald on 13 November, in the following words, we should all be greatly concerned:
At no time has the word veto appeared in any of the negotiating documents. What Mrs. Beckett, or, to be precise, Mrs. Beckett's officials have proposed, is a central clearing house for all major packages—by which they mean any offer where assistance is over £5m—based in her own Industrial Development Unit.
No Agency, not even Locate in Scotland after devolution, would be able to make its own approach to a potential investor and shape its own offer. That is seen by LiS and others, not as a veto, but as an attempt to shut them down.


I know that the Ministers in the Department of Trade and Industry have presented an entirely different picture. They say that the new arrangements have to be introduced because of the emerging regional development agencies in the United Kingdom. Would it not be better if the model for those new agencies—further details of which were, I understand, to be unveiled this morning—followed the successful model of Locate in Scotland. Ministers should ask why Locate in Scotland is successful and see whether the new agencies could emulate that success in the competitive environment of inward investment, instead of running the risk of neutering that very success by circumscribing the autonomy and ability of Locate in Scotland to negotiate directly with its clients.
Nor is it the case that the experts in inward investment believe the scare stories, emanating from people such as Sir George Russell, that huge evidence of poaching exists. Neil Hood has written:
It would be perverse in the extreme to argue for some form of rigid pan-UK control of all inward investment attraction on this type of evidence.
Are not the Government's proposals an unnecessary reaction, using as an excuse a problem that does not really exist? If the Minister tells me that the problem exists, I expect her to examine closely the various allegations that have been made and consider whether they can be substantiated. The Minister should also say why the arguments of her Scottish colleagues—that descriptions of the problem are "black propaganda"—are not valid.
Other experts in inward investment have also made key criticisms of the concordat. James Scott was the last chief executive of the Scottish Development Agency, before it became Locate in Scotland and Scottish Enterprise. He points out that what is happening is not new, but a recurring nightmare for Scotland. Attempts by the DTI to put the hems on Locate in Scotland date back to its inception in 1981—including attempts made under Lord Young and Lord Tebbit. James Scott argues that the concordat is unclear on whether investors interested only in a Scottish location in the United Kingdom will have to go through the Department of Trade and Industry. My fourth question to the Minister is a request for clarification of whether that fear is justified. Under the concordat, will an inward investor interested only in a Scottish location have to go through the Department of Trade and Industry?
Fifthly, there is no clear information in the concordat—I know that the Minister for Small Firms, Trade and Industry is especially interested in this point—on whether reinvestment cases, which are about 60 per cent. of new investment coming into Scotland, would have to go through the DTI clearing house. The fear is that the arrangements and the concordat would place unnecessary additional bureaucracy on Locate in Scotland and could mean that it would lose out internationally.
Thus far, much of the debate has concentrated on the impact in the United Kingdom. It might be useful if we could raise our sights and see how the debate—and what is seen as an attack on Locate in Scotland and its ability to perform its job—is seen elsewhere by its real rivals in inward investment attraction in Europe. One of Locate in Scotland's key rivals is the Irish Development Agency, or IDA, which has a superb record of success in attracting key investments to the Republic of Ireland. The business

section of The Sunday Tribune in Dublin last Sunday carried an article, headlined "IDA gains in curb on Scottish rival". The article stated:
IDA Ireland is poised to gain a decisive upper hand over its main international competitor in the battle to attract foreign inward investment following an attempt by Margaret Beckett, the president of the British Board of Trade, to shackle the jobs agency of Scottish Enterprise, Locate in Scotland.
The article went on to quote Irish Government sources as saying:
the implications for Ireland will be monitored by industry experts.
I bet they will. I am sure that the IDA and other sources in Ireland must be rubbing their hands at the apparent possibility that their main rival and competitor in Europe will run the risk that its ability to attract inward investment projects will be shackled by the DTI.

Mr. Bernard Jenkin: I have listened carefully to everything that the hon. Gentleman has said, but do not the new rules and concordat for Locate in Scotland issued by the DTI arise as a direct result of his support for the Government's devolution proposals? The hon. Gentleman should explain to the Scottish people why devolution will put Locate in Scotland at a new disadvantage.

Mr. Salmond: Unfortunately for the hon. Gentleman, I have a longer memory, having been in the House longer and having been involved in inward investment longer than he has. The attempt to shackle Locate in Scotland is nothing new for the DTI. It was tried at least three times in the 1980s.

Mr. Fallon: rose—

Mr. Salmond: I will come to the hon. Gentleman in a second.
The best example is 1981, when the Tory majority on the Scottish Affairs Select Committee suggested doing exactly what the Government propose now. Members of the Conservative Government, who are no longer with us, because they lost their seats—perhaps this is why—proposed in 1981 to do exactly what is being done now.

Mr. Jenkin: Will the hon. Gentleman give way?

Mr. Salmond: If the hon. Gentleman can contain himself, I want to cite a few more examples before giving way again.
The plan in 1981 was stopped by the then Secretary of State for Scotland, Lord Younger, although it was supported by another former holder of that post, Ian Lang, who is now Lord Lang. What we are witnessing is nothing new. The DTI has tried for some years to put the hems on Locate in Scotland. The responsibility lies with Ministers, who have the ability, just as George Younger did in 1981, to stop this attempt if they so choose.
The argument that Scotland is getting an unfair advantage because Locate in Scotland is successful is advanced by Labour Members from the north of England and was urged on many occasions by the hon. Member for North Essex (Mr. Jenkin) himself, before he became parliamentary private secretary to the previous Secretary of State for Scotland.
The Conservative party's anti-Scottish reputation is at risk of being transferred to the Labour Government, and the result will be exactly the same: the demolition of Labour Members in Scotland.

Mr. Jenkin: Whatever tensions have existed within a Government about the rules constraining Locate in Scotland, they have always been contained and resolved within government, within the constraints of collective Cabinet responsibility, behind which some fudges and discretions can be allowed to a Secretary of State for Scotland, who has all the powers and responsibilities of that post and can answer for policy in Scotland. The rules are a direct consequence of a new locus of power created in the Scottish Executive, outwith the collective responsibility of the Cabinet. The hon. Gentleman cannot have his cake and eat it: Scotland is losing out as a result of the devolution proposals.

Mr. Salmond: The concordat makes proposals not for after the devolved Parliament is established but for now, while collective responsibility still applies and the Secretary of State for Scotland retains the whole panoply of his powers and ability to fend off such attacks from his colleagues. If the Government do not want to behave in an anti-Scottish manner, as the previous Conservative Government did, all that they have to do is to stop the attacks on Locate in Scotland.

Mr. Fallon: Will the hon. Gentleman give way?

Mr. Salmond: I have given way very generously to Conservative Front Benchers. If the hon. Gentleman is persistent, he will catch Mr. Deputy Speaker's eye, but for the moment I want to make some progress.
It is a poor allegation to make of the Government that their pattern of behaviour in this matter is exactly the same as that of elements in the Conservative party over the past 16 years. I have heard some remarkable statements from the Conservative party in recent weeks. For example, on benefit cuts for single mothers, the Conservatives' main argument is that it is outrageous that the Labour Government should be doing exactly what they wanted to do in government.
The real agenda is that there has been resentment of the success of Locate in Scotland since its inception. DTI Ministers say that the emergence of new development bodies in England makes new arrangements necessary, but the real agenda is a repetition of the DTI's attempt, made many times over the past few years, to gain control of key inward investment decisions.
The DTI objective, as reported in the press—perhaps the Minister can deny it—is to gain "proportionality" throughout the country in the number of jobs attracted by inward investment. In that case, Scotland would get only half the inward investment jobs that have been achieved over the past five years. Locate in Scotland has managed to attract about 20 per cent. of the total inward investment in the United Kingdom. Proportionality would have cost Scotland about 7,500 jobs in the past year alone and would cost us about 30,000 jobs over the next five years if Locate in Scotland maintained its success rate.
Scottish Office Ministers have been complacent. I do not accuse them, or even the incoming DTI Ministers, of knowing that a plan, now re-emerging, had been

hatched in the past to threaten Locate in Scotland's ability to attract inward investment; but all expert opinion in Scotland, be it Neil Hood, James Scott or Alf Young, sees in the proposals a challenge to the success of Locate in Scotland.
Does the Minister—with the Scottish Minister for Education and Industry sitting beside her—believe that the allegations made about Locate in Scotland and the specific inward investment project in the north of England were no more than "black propaganda"? If so, what measures has she taken to bring the relevant people to book and to challenge Sir George Russell about statements that he made to the Select Committee on Trade and Industry?
Does the Minister accept that what I have cited is indeed a proposed concordat between the DTI, the Scottish Executive and the Welsh Assembly? Does she appreciate that it is difficult for us to understand how such a document can be produced before those bodies are established? There is an inconsistency in saying that an agreement will be made before the parties to that agreement have even come into being. Does she accept that that is a betrayal of the devolution process?
Does the Minister accept what I said about sections 10 and 12 of the document? Will Locate in Scotland lose the ability to promote Scotland directly to inward investors and will the responsibility be given in all cases, regardless of whether they are specific to Scotland, to the Invest in Britain Bureau? Does section 12 extend the present guidelines beyond selective assistance, to all parts of the package, and especially to those parts in which Locate in Scotland has been so spectacularly successful in recent years?
Does the Minister accept that there is a genuine reaction in Ireland from the Irish Development Agency, a body which Conservative Front Benchers might consider to be one of the most successful in Europe and that has at its disposal powers that Locate in Scotland will not have, even when there is a devolved Scottish Parliament? That reaction, as reflected in the Irish press, shows that Locate in Scotland's major rivals for investment projects see an opportunity in the DTI's plans.
Can all the concern in Scotland be based on nothing more than rumour and speculation or is there real concern in the inward investment agency itself that the DTI plans go far further than merely making agreements between Locate in Scotland and the new agencies emerging in England, and strike at the heart of Locate in Scotland's success in recent years?
Can the Minister confirm the existence of a letter from the President of the Board of Trade to the Secretaries of State for Scotland and for Wales, laying out the plans in stark detail and making it clear that she expects the industrial development unit in the DTI to take control of key inward investment decisions?
If such a letter exists, will the Minister place a copy in the Library, as I intend to do with a copy of the concordat? Does she accept that there are real concerns in Scotland about a betrayal of the devolution process, amounting to the hamstringing of Locate in Scotland's ability to attract inward investment?
Has the Minister noted the delighted faces on the Tory Front Bench because her Government are apparently bringing into being something that many elements in the Conservative party, including many of the most


anti-Scottish elements sitting on that Front Bench, wanted to do for many years? Does she not find it extremely ironic that her Government are introducing policies which even that anti-Scottish Conservative party were unable to push through in the past 18 years? Above all, can she not see that the opportunity to create new development agencies throughout England is an opportunity to release them from the control of the dead hand of the DTI and offer them the same success and opportunities that Locate in Scotland has enjoyed in the past 17 years?
In an attempt to reflect some of the attitudes that have prevailed in Scotland in the past 17 years, I should like the Minister to consider a report by Alf Young which appeared on the front page of yesterday's edition of The Herald. He wrote:
Daewoo, the industrial conglomerate reportedly seeking a site for an 800-job glass plant in Scotland despite the economic circumstances engulfing its native South Korea, rejected Scotland as a location for the same project only last year.
Instead, after bungled negotiations by the Department of Trade and Industry's industrial development unit which infuriated senior players in the Scottish inward investment effort, Daewoo decided to take its planned investment to France.
If it is the Government's objective to neuter Locate and drag it down to the same level as the less effective inward investment agencies, is there not a real risk that the end result of that centralising process will not just be the loss of jobs from Scotland, or the transfer of them to the north of England and elsewhere, but the loss of jobs from the United Kingdom? The beneficiaries will be locations in France, Ireland and elsewhere in Europe. That is what will happen if one of the major contributors to inward investment has its activities hamstrung by the misguided, anti-Scottish actions of the DTI.

Mr. Ian Stewart: I am grateful, Mr. Deputy Speaker, that I have been allowed to make my first formal contribution on such an important issue. It is sad to note that not a single Conservative Back Bencher has seen fit to come to the Chamber to take part in this important debate.
I believe that tradition is an important anchor of our culture and I am conscious of the fact that it is the convention of the House that hon. Members should keep their first contribution light and complimentary to their constituency and predecessors. I intend to adhere at least to the spirit of that convention.
The constituency of Eccles consists of seven areas—Swinton, Pendlebury, Eccles, Winton, Barton and Irlam and Cadishead. Each has its own distinctive history and features. My right hon. and hon. Friends will be relieved to know that throughout my speech I shall refer to all those areas collectively as the constituency of Eccles.
I am proud to make the first maiden speech for the Eccles constituency for 33 years. My predecessor was Joan Lestor, who represented the seat with distinction between 1987 and May 1997. She had previously represented the constituency of Eton and Slough between 1966 and 1983. After a four-year sabbatical, she returned to the House with her maiden speech well behind her, and she remarked that after 17 years of Mars bars—the factory that manufactures them is based in Slough—she hoped to

have 17 years of Eccles cakes. She had 10 good years, and I hope that she thoroughly enjoyed our local speciality. I am pleased that she is now Baroness Lestor of Eccles, and I am confident that she will make a significant contribution in the House of Lords before she votes for that institution's democratic reform.
In her work with children, Joan Lestor epitomised the caring face of the Labour party and in her work for overseas development she represented our internationalist face. The Government's recently published, and welcomed, White Paper on overseas development bears proud testimony to her work as shadow Minister for Overseas Development before her retirement from the Labour shadow Cabinet in July 1996. I am pleased to say that, in common with Joan, I have an interest in both those subjects. Although I met Joan on only a couple of occasions before my selection, I have always held her in high regard and I am sure that the House will join me in wishing her well in another place.
The Eccles constituency is the geographic centre of the three seats in the metropolitan borough of Salford. The constituency is a suburban, industrial, working-class area on the north bank of the Manchester ship canal, due west of Manchester city centre. The boundary changes at this year's election significantly changed the shape of the seat. Its centre of gravity has moved outwards, south-west, away from the inner city, following the loss of the ward of Weaste and Seedley to the seat of my hon. Friend the Member for Salford (Ms Blears). It gained the more outlying wards of Irlam and Cadishead, where I have lived for 35 years, from the constituency of my hon. Friend the Member for Worsley (Mr. Lewis).
My hon. Friend the Member for Salford has highlighted some of the rich heritage of the metropolitan district of Salford which is also shared by my constituency. In addition to the examples that she gave, I can tell the House that Eccles has been at the forefront of design and technological development. For example, at Barton in Eccles we had the world's first combined aqueduct and rail viaduct over a road. Now we have the largest area of development land available in Greater Manchester at the Barton special economic zone.
Eccles also has a proud cultural heritage. The artist L. S. Lowry lived in the town of Pendlebury in my constituency. His appeal as a graphic illustrator of the grit and wit of Eccles and Salford people endures today, as demonstrated by the record price paid last week for a Lowry sold at Sotheby's. It is well known that he painted matchstick men and matchstick cats and dogs. It is possible that, if he were alive today, an urban fox or two would make it into his landscapes, and in the Eccles constituency they would be well protected. It is definitely true, however, that, if he were painting the same landscapes of my city today, much of the heavy industry and mills would have disappeared, only to be replaced by derelict corner shops and holes in the road, the size of craters.
Hon. Members should be aware that the roads in my constituency are among the oldest and most used industrial roads in the world. I see it as part of my job to ensure that the Government understand the problems faced by areas such as mine, which have suffered horrendous industrial decline and job losses in the past 25 years or more.
Having said that, Salford and Eccles folk are resilient and fine people. They have had the wit and ingenuity to devise appropriate plans that will reverse the worst of the


industrial devastation and the resultant breakdown in social cohesion which we experienced under the Conservatives.
My city and my constituents need the Government to do what the previous Government failed to do—acknowledge our problems and offer encouragement and backing to the city council and other partners who are working so hard towards a better environment and a more secure future for all our people. I congratulate Salford city council on making job creation its No. 1 priority. I fully support its strategy of partnership and I am working closely with it to attract inward investment, particularly to the manufacturing sector.
In the past quarter of a century, my constituency has suffered many industrial closures and job losses. The British Steel works at Irlam, the Royal Ordnance factory at Patricroft, Agecroft colliery, the power station at Swinton, and many more have shut their gates.
The male unemployment rate is 6.2 per cent. and female unemployment is 2 per cent. One third of all households are council tenants. The level of car ownership is 10 per cent. below the national average, at 57.6 per cent. My constituents warmly welcome the Government's initiatives to improve public transport and implement an integrated transport service and they look forward to the extension of the successful metrolink from Manchester to Eccles. In the 1991 census, the proportion of residents reporting long-term illness was 15.9 per cent.—higher than the 12 per cent. average in England. The proportion of lone-parent families, at 24.3 per cent., is higher than the UK average of 19.1 per cent. I warmly welcome the Government's planned extension of child care, but I also want there to be adequate benefit levels.
In the statistical jargon, my constituency is under-represented in the professional, managerial and technical classes, but please do not think that we have placidly accepted that situation. Salford city council and other organisations have had some success in fighting back, with a strategy based on collaboration and partnership. In line with that, a key interest of mine is education and training, and I want to help the local authority, the Employment Service and other agencies to achieve their continuing aims of boosting the aspirations of the people of Eccles, raising their achievement levels and improving access to jobs and training. I am excited about the opportunities offered by the new deal and confident that my constituents will gain skills, confidence and real employment prospect from Labour's policies—by God, people in the disadvantaged areas of my community and in others parts of the country need a way out of what we, in a sanitised way, call social exclusion but is more commonly known as poverty. Those people need and deserve a measure of positive prosperity and a safe environment in which to live.
There are two main aspects to inward investment—macro-economic issues and micro-economic arguments—but we must also remind ourselves of the importance of generating indigenous investment. I shall confine my comments to the extent of my personal experience of and involvement in working collaboratively with my local authority, the Salford city council, Salford university, Salford further education college and other agencies to secure investment in our city in general and in my constituency of Eccles in particular.
The figures on inward investment provided by the House of Commons Library show that the north-west of England, together with some other English regions, has not gained any of the large-scale inward investment projects since 1993. In 1996–97, we had 40 projects, just short of Wales's total of 45; and the investment in those projects safeguarded 2,256 jobs in Wales and 1,929 jobs in the north-west, so the figures are similar. However, there is a crucial difference in the outcomes in the two regions. In Wales, the investment led to nearly 10,397 new jobs, but in the north-west it brought only 1,402. It is the quality and not the volume of inward investment projects that is vital to the development and reskilling of our industries and our work force.
That is not an argument to deprive any other region of its success, but it is a call for the Government to adopt a more sensitive and strategic approach to the needs of bodies in the English regions that are trying to do their best for their communities in the absence of a strategic tier of regional government. A north-west regional development agency will go some way toward helping my region to champion its attractiveness and strengths to potential investors. Having said that, I welcome the statement of the Minister of State, Department of Trade and Industry, my hon. Friend the Member for Makerfield (Mr. McCartney), that the Government are working toward "common UK guidelines" for inward investment, which will
address the concern that public money should not be used to finance competition between different parts of the country."—[Official Report, 20 November 1997; Vol. 301, c. 281.]
I agree with that statement. I do not want a wasteful Dutch auction between regions—I just want a level playing field. However, I am keen to participate in the redefinition of the shape of the playing field, as I am a firm believer in the need for a strategic tier of regional government in England. Such an authority would draw down powers from Whitehall and would operate according to the principle that local services should be decided and delivered at the most local level possible. That would reinforce the role of unitary local authorities, but allow for a regional body with responsibility for strategic issues such as the environment, transport, economic development and, of course, investment.
Since becoming a Member of Parliament, I have worked hard with Salford city council to generate and create "a Salford package" with other social partners. I have been negotiating with representatives of major international investors from one of the more stable areas of south-east Asia, with a view to arranging a trade delegation to Salford next spring. That early experience has taught me that English areas such as Salford are at a disadvantage when it comes to grant aid and assistance, which tends to negate any arguments about best quality. If the investor is enticed to an area that can offer more attractive and all-important start-up grants and packages, that might suck existing employment from the disadvantaged area to the more advantaged area. In the long run, that cannot be to the benefit of our country as a whole, as it raises questions of fairness, equity, waste, economic planning, social exclusion and social cohesion and, indeed, democracy and governance.
On an unusual, but related, matter, I am alarmed that few members of the business community or of the public have recognised the importance of addressing what has become known as the millennium time bomb. In simple terms,


that is the breakdown as we reach 2000 of current computer systems, because their processors cannot cope with dates falling after the turn of the century. That might lead to disasters throughout the world. I shall comment only on our Government's action in that respect and why it has potential implications for inward investment in the UK.
The Government are to be congratulated on taking prompt action to address the problem by setting up the Action 2000 initiative. I am sure that the Government understand that we have now passed the awareness-raising stage and that we must now move on to finding and delivering solutions. Although a Government's ability to bring about such solutions is limited, they could nevertheless give a lead in setting up geographically based groups of interested partners in which best practice and new thinking can be shared. The crux of my statement is that if the UK can become accepted throughout the world as "year 2000 safe", in addition to the obvious benefit to our society in general, it might be a tremendous incentive to inward investment.
In conclusion, I should say that this is not the first time I have attempted to make a speech in the House. I have made several such efforts—for example, I prepared a magnificent speech for last week's debate on hunting with hounds. If right hon. and hon. Members think that the right hon. Member for Maidstone and The Weald (Miss Widdecombe) made a fine speech in support of the Bill, I can tell them that mine would have been an exceptional and magnificent supporting effort. However, I was not lucky enough to be called and my speech ended up in the bin, as did all my previous attempts. As a result, the House has had to suffer my meagre contribution today. I thank you, Mr. Deputy Speaker, for your patience and I thank hon. Members for theirs.

Mr. Jenkin: On a point of order, Mr. Deputy Speaker. From his comments, it appears that the hon. Member for Banff and Buchan (Mr. Salmond) has been furnished with a crucial document relevant to the debate by the Scottish Office—an official document that is not available to other hon. Members. For the benefit of proper debate, will you consider a short adjournment so that we can be given that document? In view of the number of hon. Members who want to speak in the debate, will you seek an undertaking from the Government that they will give us the document, so that the debate can continue uninterrupted?

Mr. Salmond: Further to that point of order, Mr. Deputy Speaker. I regret that the hon. Member for North Essex (Mr. Jenkin) misleads the House. I most certainly was not furnished with the document to which he refers by any Department. I was asking the Government about its bona fides and if they would put it in the Library. I am not responsible for the Conservative party's lack of information sources.

Mr. Deputy Speaker (Sir Alan Haselhurst): The Chair is not responsible for information provided for the House. That is the responsibility of Ministers. We shall no doubt hear from the Minister in due course.

Mr. David Chidgey: I congratulate the hon. Member for Eccles (Mr. Stewart) on his most informative maiden speech. What a shame it is that he threw his other

speeches away. He could have placed them in the Library for hon. Members' enjoyment. Perhaps we can look forward to that in future.
There is a danger of the United Kingdom's success in attracting inward investment leading to a sense of complacency. We could spend all day discussing the squabbles between Scotland, Wales and the English regions about how investment grants are distributed, but that would be a distraction because the game is moving on. We have only to consider recent events in Korea to realise that.
We take great pride in the fact that we have attracted about two thirds of Korean global investment in the past three years, amounting to about £6.75 billion. But the bubble can burst as easily as it swells. Time does not allow me to go through the three disasters that we face; suffice it to say that some 6,000 jobs that we thought we had in Scotland, Wales and the north-west seem to be substantially at risk, with about £2 billion worth of investment now cancelled, delayed or in doubt. That affects the whole of the United Kingdom, not just one area.
The major threat to inward investment is not just the volatility of the Asian economies, but the growing competition for that investment from other parts of the world, particularly eastern Europe. For instance, the state incentives now on offer for inward investment in the Czech republic in some cases amount to funding 50 per cent. of a project. Compared with that, the sort of inducement that the United Kingdom can offer through Government grants is paltry.
Pursuing an international auction on ever greater financial inducements leads us up a blind alley. It is essential that we understand that financial inducements are only part of the equation. Potential long-term investors are more concerned about the quality and skills of the work force, the modern management techniques available, and the efficiency and productivity from which their investments will benefit. Turf wars between Scotland, Wales and the English regions are a bit of a smokescreen. The claims and counterclaims on financial packages that are available in Scotland or Wales compared with the English regions only undermine our overall inward investment performance.
I welcome the introduction of a concordat by the Department of Trade and Industry to resolve such differences and arguments, but it is essential to clarify the DTI's role in that. I hope that the Minister will do so today. What is the precise difference between the DTI vetting projects and the DTI vetoing projects? That is a question of semantics that I have yet to get to the bottom of.
The concordat should not become an excuse for smothering initiative in national and regional agencies. It must not introduce centralised, bureaucratic control from Whitehall. It must not be used as a way of delaying decisions through DTI interference in potential projects. It must not be allowed to breed indifference to the needs of Britain's potential and prospective clients.
Inward investment is a complex and varied process. For example, green-field development projects—new factories and manufacturing plants, the projects on which all the wrangling seems to concentrate—represent only some 5 per cent. of total inward investment in the UK. As Neil Hood from Strathclyde university has pointed out, the vast bulk of inward investment is through


mergers, acquisitions and alliances—projects which are not necessarily mobile and certainly not necessarily contestable by different regions of the UK.
Inward investment decisions are made on a range of issues. They can be summed up as bringing value for money to the financial investor. Financial assistance is only part of that process. It will be highly damaging if the concordat results in a rigid formula based solely on financial assistance and ignores the importance of all the other factors which will vary from one region to another.

Mr. Michael Moore: It is sensible that we should have discussions around the UK and achieve a concordat between the different nations and regions, but does my hon. Friend agree that there should be no dumbing down of the process with the high quality work being done by agencies such as Locate in Scotland being reduced to some lowest common denominator to suit the DTI?
I take the point made by the hon. Member for Banff and Buchan (Mr. Salmond) that it is completely inappropriate to seek a concordat in advance of a Scottish Parliament, to which the issues will be devolved and which must form its own view. In due course, when that Parliament is up and running, it should enter as a full partner into any concordat that is reached.

Mr. Chidgey: My hon. Friend makes a telling point. It is vital that we do not dumb down the process but learn from best practice.

Dr. Liam Fox: Does the hon. Gentleman accept that when the DTI talks about co-ordination it is Whitehall-speak for the dead hand of Treasury involvement?

Mr. Chidgey: I am surprised to find myself agreeing with the hon. Gentleman. It is vital—I hope that the Minister will respond to this—that we should use the DTI to boost best practice rather than to constrain and stifle it. The concordat's key role will be to promote best practice. As the hon. Member for Banff and Buchan (Mr. Salmond) said, Locate in Scotland has set high standards in diligent and patient company tracking. Again, Neil Hood's words are relevant. The Northern Development Company and the West Midlands development agency have all had major successes from which other regions can learn. The DTI has a crucial role to play in ensuring that best practice is promoted throughout the regions.
Today's announcement of the establishment of the regional development agencies is a good starting point. I welcome the Government's view that the RDAs should not be creatures of local and central government, but the Government must show that they mean what they say, because neither should the RDAs be glorified property managers.
The United Kingdom has lost out within the EU by not having strong, powerful and properly resourced regional organisations that can attract inward investment from the EU and provide the matching funds that such projects require. In that context, the RDAs' long-term success depends on adequate funds. I am disappointed that at present there seems to be no such provision. They need adequate funds and to be able to provide much more economic development stimulation than most regions

have managed so far. It is far more important to direct Government assistance not to up-front grants but to inward investment projects which add further value to the economy in research, design and development.
A key role of the RDAs will be to foster value for money for investors. RDAs could and should play a major part in creating that added value in their areas. RDAs need an overarching role with the training and enterprise councils in tackling skill shortages. We do not want a return to that appalling and failed programme of training for work which was merely a device for massaging the unemployment statistics and added little to communities' skill base.
Most of all, we need to provide inward investors with a highly skilled work force on which they can rely and with high quality management. Only if the RDAs are given the resources and flexibility that they need to meet those challenges can we maintain the UK's inward investment performance.

Mr. Michael Fallon: I congratulate the hon. Member for Eccles (Mr. Stewart) on finally making his maiden speech. As he explained, it was through no fault of his own that he was unable to do so until this morning. He paid a generous tribute to his predecessor who is well remembered and well respected on both sides of the House. He gave us an interesting tour d'horizon of Eccles and, perhaps, a glimpse of a streak of, independent-mindedness when he referred to the need to maintain the present level of benefits. I hope that that streak of independent-mindedness does not lead him too quickly on to the list prepared by the Minister without Portfolio, but we shall watch his progress with interest.
I should like not to congratulate but to thank the hon. Member for Banff and Buchan (Mr. Salmond) for initiating today's debate. He has exposed perfectly for the House the tensions that will arise directly from devolution, and indeed have already arisen from the devolution proposals in the White Paper. He sketched the anarchy that will result from establishing a separate Parliament and Assembly in Scotland and Wales respectively and separate regional agencies and assemblies in England.

Mr. Salmond: Will the hon. Gentleman give way on that point?

Mr. Fallon: Today's debate is a direct consequence of the devolution Bill.

Mr. Salmond: Will the hon. Gentleman give way?

Mr. Fallon: The hon. Gentleman did not give way to me, but, as I am more generous than he is, I will give way to him.

Mr. Salmond: From the intervention of the hon. Member for North Essex (Mr. Jenkin) in my speech, I gathered that he accepted that exactly those tensions existed within the Conservative party in their period of office and that Lord Young, Lord Tebbit and Lord Lang at one point supported proposals identical to those that the present Government are making?

Mr. Fallon: The hon. Gentleman is falling directly into the trap that we have set for him. Of course those tensions


existed under previous Governments. They exist under any Government. The point is that those tensions were resolved within a collective, United Kingdom Government. A concordat would not have been necessary had the present Government not published their devolution proposals. They would not need a concordat to resolve the tensions that have been mentioned, were it not for the devolution proposals that the Government have published and the hon. Gentleman has championed for years.
By attacking serious English industrialists such as Sir George Russell, the hon. Member for Banff and Buchan is simply stirring up the anti-English sentiment which we have long suspected lies behind the agenda of the Scottish National party. The hon. Gentleman suggested that English regions should not have the freedom to fight their corner that Scotland had.
Today's debate would not have taken place were it not for the devolution proposals and the arrival of a Labour Government committed to them. The previous system worked. There was collective responsibility for all inward investment into the United Kingdom. There were rules that applied throughout the United Kingdom. The fact that Locate in Scotland, representing 10 per cent. of the population, managed to achieve 20 per cent. of inward investment shows how that success was managed in a United Kingdom system. We congratulate Locate in Scotland on that, but it was achieved under United Kingdom rules and collective Government responsibility.
The Invest in Britain Bureau was established precisely to take the lead in overseeing all inward investment promotion overseas for the whole of the United Kingdom and the handling of individual inward investment cases here in the United Kingdom. The result was an outstanding record in the quality and quantity of investment attracted.
The most recent Organisation for Economic Co- operation and Development report said that the United Kingdom attracted about 40 per cent. of inward investment into the European Union in 1996—about $32.7 billion of foreign direct investment. I will put that achievement in context by saying that France came second, with a mere 17 per cent.
The report of the Invest in Britain Bureau for 1996–97 showed a record 483 projects attracted to the United Kingdom during 1996–97, creating 46,000 new jobs and safeguarding about 47,000 existing ones. During 18 years of Conservative government, 4,700 inward investment projects were attracted to this country, creating or safeguarding about 800,000 jobs. That is a substantial record, and in July 1998 Conservative Members will look carefully to see whether the present Government have matched our achievement last year in attracting 483 projects.
It is no use telling us now that there have been difficulties in the far east. When I was in Korea in September, I heard directly from senior industrialists in Samsung and other companies that the strong pound encouraged by the present Government was already bringing into question the future development of their projects on Teesside and elsewhere.
That Conservative record has been deliberately placed at risk by the Government through their proposals to devolve power to Scotland and Wales, their plans for separate regional development agencies and their economic policies for higher taxation and more regulation.

Jacqui Smith: An Invest in Britain Bureau survey showed that 39 per cent. of companies suggested a location in Europe or the European single market as one of their main reasons for locating in the UK. Does the hon. Gentleman therefore agree that the positive approach that the Labour Government have taken to Europe, as opposed to the very negative attitude taken by the official Opposition, will play an increasingly important role in encouraging companies to come to this country?

Mr. Fallon: I take it from that intervention that the hon. Lady expects Britain's percentage of inward investment projects coming into Europe to rise above 40 per cent. if she says that the present Government's European policy is more positive than ours was. In July 1998, we shall discover whether that is true.
Last year, a record was achieved. The Labour Government must show that they can improve on the record that they inherited. Conservatives say that, as a result of policies for higher taxation and more regulation and by deliberately devolving power to Scotland and Wales and setting up regional development agencies, the Labour Government will jeopardise the type of investment that we attracted into the United Kingdom as a whole.
The Scottish Executive will have power to attract inward investment and I suspect that, eventually, it will find the ability to subsidise that inward investment in the ways that it chooses and in the direction that it prefers.

Mr. Alasdair Morgan: Will the hon. Gentleman give way?

Mr. Fallon: I have given way generously.
I believe that once that Parliament is established it will be difficult for the House to control the budget that the Scottish Executive takes over. Who knows? No doubt some of the additional funding provided under the Barnett formula for housing, for the Scottish health service or for policing in Scotland will soon find itself smuggled along by back channels into Locate in Scotland and other agencies that are established more locally. Why else would Ministers have been wrangling in the past three months about the concordat, of which the hon. Member for Banff and Buchan has received a copy?
Of course those tensions will arise and of course Scottish Executive will have money at its disposal. Unless checked and brought back properly within a United Kingdom framework, there will be little to stop Locate in Scotland breaking the existing United Kingdom rules with its own slush funds carefully garnered from housing and health budgets and outbidding the other regions for prestigious projects. That is exactly the kind of anarchy that will unfold as a result of those proposals.
As well as setting up a Parliament in Scotland and an Assembly in Wales, the Government will make matters worse still by setting up regional development agencies. We shall be getting fuller details on those this afternoon. The original objectives of the regional development agencies were published in the consultation paper in May.


Their first objective is to co-ordinate regional economic development, but their second objective is to help attract inward investment.
We are told that it is not envisaged that each region will have to conform to a specific prescriptive framework. On the contrary, the legislation will allow each region to have an agency, the organisations and activities of which fit the region's circumstances. The northern development agency may regard the funding of inward investment as a higher priority than the East Anglian agency does and may choose to allocate more of its resources to it. That is precisely what the Government are encouraging. We shall thus see an end to a United Kingdom approach to inward investment. We shall have fragmentation—one region or territory set against another, duplicating effort, budgets and resources. Ultimately, the United Kingdom as a whole will lose out and I suspect that, from next July onwards, that marvellous percentage—40 per cent. of all European inward investment achieved by this country—will start to decline.
That is probably what the hon. Member for Banff and Buchan wants. He favours that kind of anarchy. Indeed, he suggested that Locate in Scotland should have complete autonomy and the ability to pursue the inward investment projects that he wants. I wrote down those words and I invite the hon. Gentleman to deny that he uttered them. I suspect that he wants no limits on Locate in Scotland's autonomy and ability to fight for inward investment projects.

Mr. Salmond: The hon. Gentleman misunderstands the present position. To show his expertise in and command of the subject, can he tell me the percentage of inward investment to Scotland where the first contacts were with Locate in Scotland and the percentage where the first contacts were with the Invest in Britain Bureau?

Mr. Fallon: The hon. Gentleman tries to tempt me, but it is not my job to answer questions about percentages; it is the Minister's job when she replies to the debate. I notice that the hon. Gentleman does not deny what I said: he wants no cap or restraint on Locate in Scotland's autonomy and ability to subsidise—

Mr. Deputy Speaker(Mr. Michael J.Martin): Order. I am sorry to interrupt the hon. Gentleman's speech, but he was turning his back to the Chair. That is not the done thing in the Chamber, so perhaps he would address the Chair occasionally.

Mr. Fallon: I apologise, Mr. Deputy Speaker. I was wrongly tempted by the Scottish National party to turn to my left.
The hon. Member for Banff and Buchan has not denied the fact that he wants no restraint on Locate in Scotland. He wants the Scottish Executive to be fully free to compete for any subsidy for inward investment projects that head towards the United Kingdom.
It is for the Government to answer for the mess that they have created. I wish to put some key questions to the Minister. First, why has the concordat suddenly become such an issue? It cannot be because of the new regional development agencies, which will be quangos for the next five years. There will be no assemblies before the next Parliament, so that cannot be the pretext. Is not the reason simply the emergence of the Scottish Executive?
Secondly, can the Minister explain why a concordat has not been necessary in the past? Locate in Scotland, the Northern Ireland development organisation and the Welsh Development Agency have been powerful magnets with powerful budgets. They have good records, but they have always co-existed happily in the past. Why has such a concordat not been necessary before?
Finally, has the dispute between the Scottish Office and the Department of Trade and Industry—and, indeed the Department of the Environment, Transport and the Regions—been truly resolved? If not, and if it is to become a running sore between London and Edinburgh—between this Parliament and a new Scottish Parliament—we shall simply play into the hands of the Scottish National party, which supported the Government's devolution proposals precisely to foment the kind of dispute to which the hon. Member for Banff and Buchan has drawn the House's attention today.

The Minister for Small Firms, Trade and Industry (Mrs. Barbara Roche): We have had a good and interesting debate and I am delighted to have an opportunity to respond. First, however, I pay tribute to the excellent maiden speech of my hon. Friend the Member for Eccles (Mr. Stewart). He showed that he will be an articulate representative of his constituency. He dealt with health, transport and an issue dear to my heart—the century date change problem. I am grateful for the backing that he has given Action 2000 under the chairmanship of Don Cruickshank. It may interest my hon. Friend to know that I raised the problem at the Telecommunications Council on Monday and there was great support from other member states for what the United Kingdom was doing.
Hon. Members on both sides of the House appreciated my hon. Friend's warm tribute to Joan Lestor, who is now Baroness Lestor. On a personal basis, I look to her as a role model and friend. We would all want to emulate her fine record of work. I thank my hon. Friend and warmly congratulate him on his tremendous speech.
A number of important points have been raised, but I take this opportunity to emphasise that the Government strongly support inward investment and want to see it grow. Indeed, it was a Labour Government who had the imagination, vision and foresight to set up the Invest in Britain Bureau some 20 years ago and to set up the Scottish Development Agency, which had inward investment powers right from the beginning and which led to the creation of Locate in Scotland. I pay tribute to Locate in Scotland's professionalism, dedication and commitment.
The Government recognise the importance of inward investment to the UK economy. It needs a properly co-ordinated national effort to market the UK's attractions as an investment location. The IBB is now a jointly managed operation between the DTI and the Foreign and Commonwealth Office, reporting to Ministers in both Departments. That recognises the fact that successful promotion of inward investment requires an integrated worldwide team.
Our commitment to inward investors remains solid, and is long term. We remain committed to ensuring conditions for their success in the UK and Europe. Of particular concern to inward investors is our


relationship with the European Union. The Government recognise the importance of the European Union and the need to promote the UK as a leading player in the single market. We have already shown that we will work with our European partners, not against them, as our predecessors were prone to do.

Mr. Chidgey: In that context, will the Minister explain the role that she sees for regional development agencies in securing more funds from the EU, especially matching funds, which will require some financial stream through the RDAs?

Mrs. Roche: We have always recognised that regional policy can play a great role. There should be a voice for the regions. That is why the Secretary of State for the Environment, Transport and the Regions will produce his proposals.

Mr. Godman: I welcomed my hon. Friend's comments on the origins of Locate in Scotland. It came from a Labour Government, by way of the SDA. I seek from my hon. Friend an assurance that there will be no reduction in the role or the autonomy of Locate in Scotland.

Mrs. Roche: The role of Locate in Scotland is extremely important. The scaremongering that we heard is entirely inappropriate. I regard the dedication and commitment, and the track record, of Locate in Scotland as being of a very high order.
Last year, the UK recorded some 492 inward investment successes, involving more than 94,000 associated jobs. The UK stock of inward investment is now more than £154 billion. Of those, Scotland had 76 successes—

Mr. Fallon: Who does she think did that?

Mrs. Roche: The hon. Gentleman asks from a sedentary position who did that. I can tell him who started the process: a Labour Government who had the imagination and the foresight to set up the programme. Not for the first time, the Labour party is showing that it is the best party for business, in contrast with the tired diatribes that we so often hear from the Opposition.
Of those inward investment successes, Scotland had 76, resulting in nearly 12,000 jobs. That is a tribute to all involved.
Recently, the IBB was named as Europe's best investment agency by the international consultants Coopers and Lybrand and Corporate Location, in recognition of the bureau's role in attracting foreign direct investment projects to the UK. That is warmly welcomed.
Inward investment has been a catalyst for change throughout the economy. It has meant introducing world-class management standards and has challenged established UK companies to improve their own performance. It also encourages supply chain developments, creating new regional supply opportunities for British firms, which we warmly welcome.

Mr. Salmond: The hon. Member for Greenock and Inverclyde (Mr. Godman) was not looking for praise of

Locate in Scotland, I think, although that is welcome; he was looking for reassurance. May I give the Minister the opportunity to offer such reassurance? Will projects identified by Locate in Scotland continue to pursue negotiations as they do at present? I refer to projects that are interested only in Scotland. Can she also give us the assurance that reinvestment cases, which are 60 per cent. of total inward investment, will continue to be handled by Locate in Scotland as at present? After her praise of Locate in Scotland, she is surely not saying that such projects would have to be handed over to IBB or the industrial development unit.

Mrs. Roche: Yes, of course. I hope that, as I go on, I will be able to reassure the hon. Gentleman further. With the greatest respect, his contribution was a rather sad one, which led to scaremongering and undermines the very organisation that he seeks to promote. We are in favour of Locate in Scotland and what it wants to do. Contributions such as the hon. Gentleman's do not help Locate in Scotland to deliver to its customers.
The record on inward investment has been very good indeed.

Mr. Fallon: It is all ours.

Mrs. Roche: The hon. Gentleman claims the credit for his party, as though it were all due to the Conservative Government. Does he not realise that business wanted that inward investment because of the work force? One of the reasons why investors come to the UK is because of our language and tradition. For the Conservatives to try to take credit for that is beyond belief. One of the interesting lessons of the past few months is that the Opposition have learnt nothing from their defeat.
We want to encourage competitiveness, and we are doing all that we can to create a stable business environment in which we can go forward. We shall not rest on our laurels. We know that we must go further.
In encouraging inward investment projects, I am determined that we should ensure value for taxpayers' money across the UK. The President of the Board of Trade was asked by the Prime Minister to develop a system to address understandable concerns that public money might be used to finance wasteful upward bidding between different parts of the country. As my right hon. Friend told the Trade and Industry Committee in November, she is working on detailed proposals with her Cabinet colleagues.
It is essential that sensible arrangements are agreed, based on co-operation, partnership and transparency, in order that we can ensure that offers to inward investors represent value for money for the UK taxpayer and are fair to all parts of the UK.

Mr. Fallon: rose—

Mr. Alasdair Morgan: rose—

Mrs. Roche: No. I do not have much time and I am anxious to make progress. I apologise to the hon. Gentlemen. If I had time, I would take interventions.
We have heard speculation, founded on rumour. It was raised by the hon. Member for Banff and Buchan (Mr. Salmond) and compounded by the hon. Member for


Sevenoaks (Mr. Fallon). Not for the first time, we see a linkage between the Conservative party and the Scottish national party. It was said that the DTI seeks centralisation or a veto, contrary to the proposals on devolution. That is absolutely not the case.
It has also been rumoured that the new arrangements are bound to be bureaucratic. That was suggested by the hon. Member for Eastleigh (Mr. Chidgey). Again, I can reassure the hon. Gentleman and the House that that is not the case.
There has been much interest in the press, all of it speculation, and we have heard some of that in the House today.
The Minister for Education and Industry, Scottish Office, put the case well. He is reported in The Herald of 29 November as having said that there has been
tedious scaremongering by people whose politics depend on all news being bad news.
On that occasion, the Government were reported properly. I could not agree more with my hon. Friend.
We are seeking simple, transparent arrangements, based on co-operation and partnership, which may simplify consideration of new projects.
The Government's devolution programme is a key part of our comprehensive programme of constitutional reform. Devolution will provide a strong, democratically elected Scottish Parliament and national Assembly for Wales, within a strong United Kingdom.
The new bodies will reflect the needs and circumstances of the people in Scotland and Wales, working within a UK framework, so that matters that are best handled on a United Kingdom basis will continue to be dealt with at that level.
Those are basic democratic reforms that will strengthen and modernise Britain for the benefit of everyone living in this country, but it is essential that devolution should not undermine the UK's position in the wider world. It is

the positive factors shared by every part of Britain that we must thank for our success in attracting more foreign investment than any other developed country in the world, apart from the United States.
The world looks to Britain as a whole for profitable investment, and anything that undermines our united promotion of UK plc overseas can only harm our international image in the long run.
The Scotland and Wales White Papers on devolution indicated that there would be a concordat on financial assistance. We are now looking at how the concordat should be drawn up.
Inward investment is all about partnership: national, regional and local organisations and individuals from private, public and central Government organisations working together to provide a quality service for inward investors. We shall hear later today about the proposals and the important contribution of the regional development agencies in that regard. The White Paper will set that out in more detail. Inward investment takes place in a fiercely competitive world, and our performance must be judged on that basis. We shall build on our record so that we have a competitive economy with competitive companies in a competitive United Kingdom.

Dr. Fox: On a point of order, Mr. Deputy Speaker. You were not in the chair when this point was raised earlier. There are a number of written questions on the Order Paper regarding the timing of the publication of the concordat on inward investment. The hon. Member for Banff and Buchan (Mr. Salmond) claims to have a document showing that discussions about that matter are now well advanced. Either the Government have not yet drawn up the document or the hon. Gentleman has useless information—both scenarios cannot be correct.

Mr. Deputy Speaker: That is a matter of Government responsibility and not a matter for the Chair. The hon. Member may wish to raise the issue through the usual channels, but it is not a point of order.

Meat and Bonemeal Storage

Ms Julia Drown: This debate concerns the storage of meat and bonemeal potentially infected with BSE that the Government has to store as part of its cull of over-30-month-old cattle. That meat and bonemeal is in storage until incinerators are available or until other methods are found to dispose of the material. The matter is of interest to my constituents as a planning application has been made to store large quantities of this meat and bonemeal in Wroughton in my constituency.
I am pleased to have the opportunity to debate this issue, which is causing grave concern to many of my constituents. I know that it has also become a concern in the constituency of my hon. Friend the Member for North Swindon (Mr. Wills), so I am glad to give him some time to speak in this debate and represent the views of his constituents. I have brought with me just some of the huge amount of correspondence that I have received on this subject. I have a pile of correspondence comprising thousands of cards from my constituents who wish their voices to be heard and heeded.
I raise the issue not only on behalf of my constituents in the villages of Chiseldon and Wroughton but on behalf of the many other people who are potentially affected by the storage of meat and bonemeal. I know that the new Labour Government want to minimise the risk to the public, but the current scheme involving the sites for storing meat and bonemeal is not achieving that aim.
I am acutely aware that responsibility for the scale of the problem lies firmly at the door of the previous Conservative Administration. However, it is now the responsibility of the Labour Government to sort out the problem while minimising the risk to the public. I shall raise three main questions in the debate: first, whether the Government can reduce the need for storage sites by increasing the capacity for incineration; secondly, and most important for my constituents, how the Government will ensure that essential storage sites are located in areas and buildings that minimise the risk to local communities; and, lastly, how we will ensure that storage sites are run in a way that minimises the risk to the public.
To amplify the first question—whether the storage needs of potentially infected meat and bonemeal can be reduced by increasing the volume incinerated—my constituents want to know whether all incinerators that could be used for the over-30-months scheme are being used, and whether the incinerators that are operating are doing so at full capacity, 24 hours a day. We urge the Minister to look into that matter. The costs of storing meat and bonemeal must be increasing. If so, increased incineration capacity could reduce costs and the risk to the public.
I recognise that even if the volume of meat and bonemeal incinerated can be increased, there may still be a need to store some of that material. If so, we move to my second area of discussion. I urge the Minister to re-examine the way in which decisions are made regarding storage sites. At present, it seems that private companies have a free hand in deciding where they would like to store the material. Those companies do not need to apply for planning permission to store meat and bonemeal if the site is already approved for storage.

They must apply to the Environment Agency for a waste management licence—but not for 12 months. So unlicensed, potentially infected meat and bonemeal can be stored in unsafe circumstances, as is proposed in my constituency.
In South Swindon, the proposed meat and bonemeal storage site is on raised ground at RAF Wroughton. The proposed storage buildings are 50-year-old aircraft hangars, which have not been maintained since their service during the second world war. The hangars are home to rats and pigeons, which previous users of the buildings have failed to get rid of. Those animals and birds could carry potentially dangerous particles from the meat and bonemeal throughout the area, and would thereby increase the risk of infected waste material re-entering the food chain.
No part of the hangars is properly sealed. The floors are cracked and would allow any liquid waste to soak into the ground, and thus move into the local water supply. The hangar roofs are structurally weak, and local people tell me that they may not withstand a heavy winter snowfall. The hangars are situated on top of a hill. Such a position would undoubtedly add to the likelihood of infected waste making its way into the water supply on which local businesses and homes rely. What is more, the location is windswept, and dust particles could be blown from the site not only into Wroughton but onto the rest of Swindon below.
The situation is of real concern to Swindon people. For example, they have heard that Professor Richard Lacey of Leeds university has stated that there is no data to show that the new-variant Creutzfeldt-Jakob disease, which is linked to BSE, cannot be acquired by inhalation—that is, that the disease cannot be spread by air particles. Unless it can be shown that there are no risks, it is not sensible to store the meat and bonemeal in hangars that are full of holes in an area that is close to a large population on a site where it is sometimes hard to stand still because the wind is so fierce.
If the hangars themselves do not present enough problems, the site is also difficult to access. It is proposed that there will be up to 20 heavy goods vehicle movements every day to transport the meat and bonemeal, with each lorry weighing up to 38 tonnes. The lorries would have to use steep and narrow access roads through the villages of Chiseldon and Wroughton—roads on which children travel to and from school and where elderly people go about their business. Those roads are unsuitable for such large vehicles and the road network is inadequate for such journeys. So my constituents face the added risk of accidents involving those large lorries.
I want to help the Minister in what I know is a very difficult task. The solution may be found in the answer to my first point. If it is not, I ask the Minister to consider another option: rather than leaving storage sites to the vagaries of the markets, the Government agencies involved—the Environment Agency and the Intervention Board—should be given a proactive, rather than reactive, role in considering storage sites. Those agencies should seek out, or insist that the businesses involved seek out, the best sites in the country that will minimise the risk to the public.
I should like the Minister to learn the lessons that the previous Government did not learn. A couple of years ago, unknown to most local residents, meat and bonemeal


began to be stored at RAF Quedgeley near Hardwicke in Gloucestershire. Unsuitable hangars were also used there, but the public were not aware of the storage until it started. The local residents rightly protested about the unsuitability of the site and launched such a concerted attack that the project was driven away, causing the company considerable trouble and cost.

Mr.David Drew: I confirm my hon. Friend's tale. The people had no knowledge of the storage until the material started to arrive. In the end, the Intervention Board decided to move the material on the basis that the hangars were neither watertight nor secure from wildlife. Would my hon. Friend care to comment on that?

Ms Drown: That is my point exactly. I warn the Minister that the Quedgeley fiasco will be repeated in Wroughton if the current plans continue—but the situation will be even worse. Wise film producers usually decide not to make a sequel to a movie that has flopped: Quedgeley I was a disaster; Quedgeley II in Wroughton should be avoided by Government, the local authority and by the company involved.
At this point, the Minister must be thinking that I am being too negative. Where, he will ask, is the equivalent of "The Full Monty" for storage sites? There are examples of better, successful sites, and such examples should be used to set minimum standards for the future.
The buildings at Wrangaton in Devon are strong and well built, and are made from brick, with sound roofs. There has been no opposition from the local community, because the risks have been minimised. The buildings are solid, well maintained and are some way from any large population. The contrast is there. When there are suitable sites in the country, surely it cannot make sense to pursue unsuitable sites such as that in Wroughton. It is not good enough for a company to say, "This will do." The Government must be able to say, "We have found the safest storage sites, because we want to minimise risk to the public."
I turn to the licensing arrangements for storing meat and bonemeal. Will the Minister review the regulations that allow companies to operate sites for 12 months without a proper licence first being issued?
There is no point in issuing licences if the companies are not monitored. A number of my constituents visited meat and bonemeal storage sites to smell the unpleasant smells and to see how the licensing system operates. They read how the waste management licence application sets down a number of strict requirements. These include keeping waste material dry and unheated, ceasing operations in wet weather, ensuring that site operatives always work in pairs and wear suitable protective clothing and masks, and not allowing the doors to the store to remain open unnecessarily.
However, when my constituents visited a site in the south-west, they exposed violations of the licence. The operatives were not wearing any special protective clothing. The owner of the company freely admitted that operations continue in wet weather. Operatives were working alone, and the doors to the store were allowed to stand open, even during unloading. I am sure that the House will understand how those findings add to the concerns of my constituents.
I have posed a number of questions to the Minister from my constituents. I appeal to the Government to take a proactive approach to storage sites for potentially infected

meat and bonemeal, to find the best sites in the country—sites that will minimise the risk to the public. Storage buildings should have a sound and sealed structure free from vermin or birds, preferably away from heavily built-up areas. The storage company should receive a licence from the Environment Agency before operations begin. Safeguards should be adopted on the site and in the transportation of the meat and bonemeal, which should not be transported on unsuitable roads.
I hope that the Minister will provide a timetable to ensure that all available incinerators work at full capacity, a timetable that shows us when no further storage sites will be needed.
I hope that I have made it clear today that the hangars at Wroughton cannot be the best place to store this potentially infected material. The risk may be small, but a risk there is. I know that the Government wish to minimise that risk. The thousands of people in Wroughton and Chiseldon know that their site is not suitable.
I wish to prevent any more time, energy and money from being wasted on the Wroughton proposal by the Government, my constituents or the company involved. I trust that the Minister will, in his answer today, be able to outline a way forward that recognises the inadequacy of the current plans in Wroughton, and in the current decision-making process on meat and bonemeal storage in the United Kingdom.
As I said at the start, this is not only about the safety of my constituents; it is about minimising the risk for everyone.

Mr. Michael Wills: I am grateful to you, Mr. Deputy Speaker, for allowing me the speak in the debate. I congratulate my hon. Friend the Member for South Swindon (Ms Drown) on bringing this important matter to the attention of the House, and on her cogent analysis of the issues.
The storage of meat and bonemeal in my hon. Friend's constituency has become a matter of intense worry and concern to her constituents. It has now become a matter of some concern to mine, too, since I learned on Monday that the Intervention Board is considering storing meat and bonemeal at Sevenhampton, in my constituency. Already, my constituents are expressing their disquiet.
I recognise the enormous problems caused by the tragedy of bovine spongiform encephalopathy. I also recognise that there is not the capacity in this country to incinerate all the meat and bonemeal immediately. That raises difficult questions of what to do with the material in the meantime. My hon. Friend pointed the way forward today with some very positive and constructive proposals.
I also recognise that the Intervention Board does not propose to store at Sevenhampton meat and bonemeal from animals showing any clinical signs of BSE, but I am dismayed at the apparent lack of concern for public sensitivities over this matter. The desperate plight of the victims of Creutzfeldt-Jakob, and the economic crisis that BSE has created for British farmers are well known. I am sure that everyone in North Swindon wants to support all the efforts that are being made to deal with the tragedy. However, we all must recognise that the general public remain understandably worried about the consequences for them.
It is not adequate for experts simply to satisfy themselves that there are no public health risks. The public need to be reassured, and in detail, that that is the case. I do not find it acceptable that the only public discussion of the storage of such material in my constituency appears to be a brief letter from the Intervention Board to Swindon council, which states that only meat and bonemeal from healthy animals will be involved, and that the Intervention Board will seek a waste management licence exemption from the Environment Agency.
In that short communication, the Intervention Board seems to have overlooked the fact that the animals in question are being slaughtered precisely to restore public confidence, and that their storage prior to incineration involves questions of public confidence and reassurance. I shall be grateful if the Minister will reassure my constituents by taking the following three measures. First, he should require the Intervention Board to explain in detail why the storage of meat and bonemeal at Sevenhampton would pose no—I stress the word no—public health risk, including a full description of the security of the storage facilities, to answer the points raised by my hon. Friend. If the Intervention Board cannot provide such an explanation, I hope that the Minister will halt immediately any plans to store the material at Sevenhampton.
Secondly, I ask the Minister to require the Intervention Board to apply for a waste management licence from the Environment Agency before any meat and bonemeal is stored at Sevenhampton. That would enable the arrangements to be scrutinised by independent experts. At the moment, the Intervention Board is considering an exemption from such a licence. Whether or not it is technically entitled to do so, such a move is hardly likely to encourage public confidence in the proposal. I urge the Minister to ensure not only that adequate precautions are taken, but that they are seen to be taken.
Thirdly, I ask the Minister to confirm that there has been a full investigation of all the available alternatives to the lengthy storage of meat and bonemeal before incineration. I shall be grateful if he will reassure my hon. Friend that the measures that she proposes are being fully investigated. Has any consideration been given to shipping some of the material overseas for incineration where there is available capacity? If no such investigation has been carried out, I shall be grateful if the Minister will confirm that one will be launched immediately. If there is any practical alternative to the lengthy storage of this material at Sevenhampton, which would allay public concern, I ask him to confirm that it will be adopted.
BSE and all its dreadful consequences have been a national tragedy. If we are ever to emerge from it, it is vital that the Government recognise the full extent of continuing public anxiety about BSE and do everything in their power to reassure the public about everything connected with it. They should provide full information about what is being done; actively seeking measures to incinerate immediately all relevant meat and bonemeal will be central to that process. I very much hope that the Minister will be able to respond positively and constructively to the debate.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Jeff Rooker): I congratulate my hon. Friend the Member for South Swindon (Ms Drown) on securing the debate. I also congratulate my hon. Friends the Members for North Swindon (Mr. Wills) and for Stroud (Mr. Drew) on their assiduous concern for their constituents. It is right and proper that they raise the matter in the House. I shall do my best in the time available to answer some, if not all, of their points.
I was at the Dispatch Box almost a week ago making the same points. I make no apology for repeating some of what I said then regarding the operation of the over-30-months scheme. Many misconceptions and fears about safety need to be addressed. We must put them into perspective. We need to address them, not dismiss them. I shall return to the advice that is given by the Government's independent scientific committee, and explain the results of the risk assessments carried out by the Environment Agency, which were published in the summer.
I spoke briefly on this matter last week, and understand the special concerns that have been expressed by my hon. Friend the Member for South Swindon regarding the proposal to store meat and bonemeal at Wroughton airfield. I know about the public meeting that was called and the strong concern that has been expressed by residents. I did not know in detail about the visit that her constituents made to storage sites in the Exeter area. I hope that all the alleged breaches of the licence will be fully investigated, because it is no part of the policy of the Government or the Intervention Board to have meat and bonemeal stored in such massive quantities in breach of any of the licensing arrangements, any of the agreements with planning authorities, or any of the arrangements entered into with the Environment Agency. Those matters will be fully investigated.
I know from my correspondence that many people think that the over-30-months scheme cattle have BSE. That is emphatically not the case, although I acknowledge that studies carried out by Professor Anderson and others at Oxford have shown that a very small percentage of those cattle presented for slaughter may be incubating the disease, because it takes many years. The selective cull scheme addresses that problem, because it involves the lengthy operation of tracing the birth cohorts of confirmed BSE cases and removing them from the national herd.
I shall explain briefly the background to the over-30-months scheme and the rationale behind current policy. The scheme provides for the slaughter and destruction of cattle aged over 30 months. Its origins lie in the previous Government's decision to prohibit the sale of meat from over-30-month animals. That decision went beyond the independent advice of the Spongiform Encephalopathy Advisory Committee to debone cattle intended for human consumption in licensed plants supervised by the Meat Hygiene Service. There were contributory factors: retailers and catering establishments were reluctant to sell over-30-months meat, and farmers' representatives were keen for the Government to intervene.
Compensation and disposal arrangements were established in European Union regulations in April last year. Maintenance of the over-30-months scheme—and


whatever we do to change it—is a pre-condition of the Florence agreement on the lifting of the export ban on beef and cattle. The rules do not allow for cattle that display clinical symptoms suggestive of BSE to be purchased under the scheme. The number of confirmed BSE cattle has declined rapidly since it peaked at some 36,000 cases in 1992. Fewer than 100 cattle a week are found to be suffering from BSE. Suspected cases are slaughtered on the farm, and are promptly sent for direct incineration. They are not stored as meat and bonemeal: they are completely incinerated. There are also stringent ante-mortem checks at abattoirs to look for the disease in animals presented for slaughter.
European Union rules require scheme carcases to be incinerated or rendered and destroyed. At the outset of the massive slaughter programme, incinerator capacity was insufficient to deal with the large number of cattle carcases. The Intervention Board executive agency has conducted tender exercises to increase the disposal capacity available to the scheme, but use of new incinerator capacity for carcases and meat and bonemeal remains subject to the necessary planning and environmental consents being obtained.
No operator can build an incinerator to bum meat and bonemeal without the approval of the planning authority and the Environment Agency: my Department is not involved in the planning process. It is not possible, in those circumstances, to produce a timetable for incinerator capacity. Such a timetable is not easily available, because every application is carefully analysed. There may sometimes be local opposition, which may or may not be justified. We rely on science, and we operate on the precautionary principle. We take stringent measures to protect public health.
I assure my hon. Friend the Member for South Swindon that all authorised incinerator capacity is being used, mainly to deal with casualty animals. We are hopeful that more will come on stream shortly, but it depends on local decisions by planning authorities and the Environment Agency. Some meat and bonemeal is burned in appropriately authorised, high-temperature waste incinerators, but no decisions have yet been taken on other major disposal options, including the option to burn meat and bonemeal in power stations. Full weight will be given to the protection of the environment and human health in making any decisions. The Government will not cut corners in this exercise.
In the absence of sufficient incinerator capacity, the majority of carcases are being rendered to meat and bonemeal and tallow, which is stored in its most manageable form. Any further treatment prior to final disposal would add significantly to costs.
There is an added complication to the storage problem. The number of cattle presented in the first eight months of the scheme was double that in a normal year, which has put enormous pressure on storage capacity. So far, 1.9 million cattle have been slaughtered under the scheme. They were perfectly healthy cattle which showed no signs of BSE. As a result, there are 150,000 tonnes of tallow and 280,000 tonnes of meat and bonemeal in stores around the country awaiting disposal, and stocks of meat and bonemeal are growing at a rate of about 2,000 tonnes a week.
Last week, to give hon. Members some idea of the volume, I told the House that it was the equivalent of 32 Big Bens. But that was in September, and I am

informed that the present pile is the volume of about 36 Big Bens. That is a considerable volumetric amount of meat and bonemeal.
I visited one of the stores in Chorley to see the position for myself. It was not in any way, shape or form on a par with what my hon. Friend's constituents saw in Exeter and the breaches of the rules there.
The Intervention Board will need more storage space for meat and bonemeal and tallow. In the first instance, all offers are evaluated by the board's technical officer, and many are rejected at that stage. If a store seems suitable and in the right area, the board will write to the local authority and to the local Member of Parliament informing them of its interest. It adopts an open approach to this issue, although I acknowledge that that has not always been the case.
My hon. Friend mentioned the problems at Quedgeley in the early summer of last year. I understand from officials that, owing to the need to find storage quickly, there was no time for consultation. There is no excuse for such a problem to arise now, because the board has time to plan ahead and give notice of its intentions, which is why it has written to both my hon. Friends. The Environment Agency is also contacted to discuss the suitability of the site and the practicalities of the operation, including the issue of the required waste management licences.
My hon. Friends have referred to waste management licences, but I do not have time to go into detail. There are difficulties with applications for such licences, because storage is not the final disposal of the waste: it is prior to final destruction, and no final decisions have been taken. Waste can be stored for up to 12 months without a waste management licence, but it must be stored under licensed conditions. It cannot be stored in unsafe conditions: that would be a criminal offence.
As with incineration contracts, the Intervention Board will not enter a contract with a storage company unless it has obtained the necessary planning and environmental consents. That is absolutely crucial. Health and safety legislation also applies to those sites. The Health and Safety Executive, in keeping with Government policy on BSE, adopts an ultra-precautionary approach, and has issued generic guidelines to occupational groups that have contact with over-30-months scheme material. The position is closely monitored so as to protect the workers who are involved in storage.
There are specific instructions on rodent control, because that problem must be dealt with. Odour does not seem to be a significant problem at other sites, and it should not be a problem at any site once people are outside the building. Unloading of meat and bonemeal must take place within the store with the doors shut. There is a whole host of restrictions on the unloading of lorries.
We must be assured that human health and the environment are safeguarded. We are greatly encouraged by the results of risk assessments carried out by independent technical consultants on behalf of the Environment Agency into safety aspects of disposal. We will not cut corners; nor will the Intervention Board or any other authority.
The risk assessments endorsed the advice given by SEAC last year. It considered current and proposed methods of dealing with scheme waste material, and advised that they were safe. The Government are


operating strictly on the precautionary principle. We have always made it clear that we will accept SEAC's advice on the BSE crisis. Sometimes, advice will be based on the most minute risk that can be measured, but we will take precautions that others may think are over the top and cost more than is necessary. We are not prepared to cut corners in respect of BSE.
This is an emotive subject. There is no prospect of catching new-variant Creutzfeldt-Jakob disease by inhalation, as has been mentioned in some quarters. SEAC advises that the most likely cause is exposure before the introduction in 1989 of controls on cattle offals.
I have not been able to address all the issues that my hon. Friend the Member for South Swindon has raised, or indeed that the hon. Member for Hereford (Mr. Keetch) raised last week. We are not masters in the matter of disposal, which is set out in EU regulations. I reiterate my assurance to hon. Members on both sides of House who are involved: I and my ministerial colleagues are actively considering all the options for safe disposal, although none offers a quick fix. So far, no one has proposed that we should export the meat and bonemeal for destruction, and I doubt whether the EU would allow that.

Longstone Edge

1 pm

Mr. Patrick McLoughlin: I am grateful for the opportunity to raise this matter today. It may seem that, whenever a planning application comes up, there are always people with a local interest who say that it should not go ahead. It was described by the late Nicholas Ridley as the NIMBY syndrome—not in my backyard. I hope to show that, although, obviously, we do not want a new quarry to open, it is not a matter just of the NIMBY syndrome.
Longstone Edge is a beautiful hill ridge in the heart of the Peak district national park, which is unlike any other national park in the United Kingdom because no other has so much local authority involvement, or covers the region of so many local authorities. Longstone Edge is criss-crossed by delightful paths and is easily seen from surrounding villages. It also lies in direct view of the most popular walks along Froggatt Edge, Calver and Baslow Edge. That is why people have called on me to ask the Government to call the application in, if it is at all possible.
The Peak district is within an hour's travelling distance of some 15 million people. I do not think that it is an exaggeration to say that it is the lungs of England. It lies within an hour's drive of Manchester, almost in the backyard of Sheffield and not far from the west midlands conurbation. It attracts many visitors annually. It is estimated that, last year, some 22 million day visits were made to the national park. It has outstanding natural beauty.
I do not want to leave the Minister with the view that this is a matter just of NIMBYism, because the Peak district accepts that quarrying is an important activity in the national park. It is estimated that, last year, some 7 million tonnes of limestone were quarried from the national park, and quarrying represents about 1,000 jobs overall there, so we do not take the approach that no quarrying should take place in the national park.
I have been in correspondence with the Minister for the Regions, Regeneration and Planning on the matter. During the summer, he responded to me in some lengthy correspondence, for which I am grateful and which set out some of the earlier considerations that had to be taken into account. However, I was sorry to read a letter from the Minister dated 19 September, which stated:
You will by now have received my reply to your earlier letter, dated 30 August, which I trust you found helpful.
Indeed it was. The letter then goes on:
As my letter indicated, the main responsibility for this type of development rests in the first instance with the Peak District National Park Authority, as the mineral planning authority. The Secretary of State is generally very reluctant to interfere with the jurisdiction of local planning authorities and will normally only intervene if the matters concerned are of more than local importance. Whilst it is clear that the issues in this case are of considerable importance to local residents, they seem nevertheless to be essentially of local significance and the Secretary of State's intervention in this instance would therefore seem to be unwarranted.
That was met with a fair amount of disbelief, to put it mildly, by my constituents. The very fact that the site lies in the heart of a national park, which was designated because of its natural beauty and is an area that people visit, means that it is of national, not just local, significance.
I have received many letters on the matter. In response to the Minister's view that the Secretary of State's intervention was unwarranted, one letter stated:
This is an extraordinary position to take. Firstly, this proposed development is in the heart of the National Park. This area attracts a vast number of tourists annually. The majority of them do not visit to see a quarry the size of Bakewell disfiguring a prominent skyline. The fact that the development is in a National Park surely lends the issue more than local significance. If it does not, the number of tourists who flood the area suggests that there might well be more than a local interest in the careful preservation of the essential character of the area.
That is one of the many letters that I received along similar lines once I had sent the Minister's letter to constituents.
I am not the only one who is concerned about the issue. It is not party political. All the people concerned with the national park—the local authority and parish council representatives, as well as the Secretary of State's own appointees—are concerned not just about this individual case, but about the wider context in which it has to be judged.
I was one of those who were pleased when the Environment Act 1995 was passed. It went through the House under a Conservative Government without a Division, because most of it was generally welcomed as a move in the right direction on this issue.
I am the first to accept that it is not easy to deal with the issue that I am raising because it concerns some old mineral rights. Schedules 13 and 14 to the Act cover the review and updating of old mineral planning permissions. The initial review is concerned with mineral sites where the main or only planning permission was granted between 1948 and 1982. Schedule 14 provides for the periodic review—every 15 years—of all mineral sites. That review involves a submission for approval of modern operating conditions, covering a wide range of environmental matters, together with plans for the working and restoration of the site.
Longstone Edge is a good case, in particular the area known as Backdale quarry. The site lies about 5 km from the centre of Bakewell, in the heart of the national park, which was designated in 1951 for its valued characteristics.
Longstone Edge is extensively covered by several planning permissions, principally for the extraction of vein minerals by opencast and underground mining methods. They were issued in 1949, 1951, 1952, 1971, 1977 and 1978. The veins have been extensively worked in the form of substantial underground workings and surface workings going down a few metres only. That work has been in parts of the site where the veins have been known to exist and has not resulted in substantial removal of limestone. The underground workings have resulted in significant subsidence of some of the surface, so that deep trenches now exist along large stretches of the Edge.
The Backdale area of Longstone Edge has an extremely complex site history, arising primarily from a single ministerial consent for underground, opencast and surface working of vein minerals granted on 24 April 1952. In 1989, it was noted that limestone was being removed and processed at a crushing and screening plant installed at Backdale. The operator claims that at the time the removal of limestone was permitted in accordance with the terms of the permission issued in 1952.
In July 1996, RMC confirmed that long-term development of the Backdale area was being considered in the context of the review of permissions in accordance with the provisions of the Environment Act 1995. However, no working, landscaping or restoration details have been submitted by the operator for the remainder of the area—some 143 hectares. We are talking about a huge area of land. The operator claims that the provisions of the Environment Act 1995 allow for phased submissions, but that is disputed by the mineral planning authority. That highlights one of the many problems with the legislation.
One of the other problems is the time in which the MPA has to respond to applications made to it. That is a particular problem when dealing with an area of such a size. I would be the first to say that planning authorities should try to turn applications round quickly, but when we are talking about a planning application not for a building but for a permission that could last for some 45 years, more time is needed to ensure that the MPA makes the correct judgment.
The authority considers that limestone extraction on the scale proposed in the Environment Act scheme was not envisaged by the Minister in 1952 and substantially exceeds the terms of the Minister's consent. This problem comes up time and again. In 1952 when the vein extraction was granted, it was for the extraction of minerals 1 m to 2 m from ground level. We are now talking about a wholly different application from what was initially envisaged.
I know that the Minister will probably say that the Peak park, or the MPA, can place certain restrictions on RMC, make certain recommendations or go to court, but RMC would also be able to take the matter to court. If RMC won, the Peak national park might have to pay the compensation, but it does not have the money to do so and therefore has to consider very carefully before entering into any legal process because of the possible drain on its resources. The problem is not one for a local authority to take care of. The Peak national park was originally set up because of the national significance of the area.
Several people have written to me to make representations about the proposed quarry. The Government talk regularly about an integrated transport policy, so I hope that the Minister will consider the problems of transporting goods from the proposed site. The roads being considered for access to the quarry are wholly unsuitable for lorries.
The other day, Sheffield council issued a statement saying that if the proposal was to go ahead, it would want a rail link to be used. I shall be interested to see Sheffield council's plans for a railhead in Backdale quarry, because it will first have to build a railway. That might be difficult, not least in view of the time involved.
I received a letter from the Curbar, Calver and Froggatt Women's Institute, which states:
The roads being used to gain access to and from the mining site are not in good condition. Hassop Road and Froggatt Road in particular are not in any fit state for heavy vehicle use.
The traffic on the A623 is already very heavy, and many fatal and near fatal accidents are occurring, particularly in Stoney Middleton and Baslow.
The vehicles used for transport, particularly when empty, also constitute noise pollution and…the traffic starts before 5 am now".


The road that many of those vehicles would take out of Froggatt to Sheffield passes very close to some houses, which would cause considerable damage.
I hope that the Under-Secretary of State will accept that this is not a case of being anti-quarry or against the extraction of minerals. We acknowledge that that already happens in the park. However, we are now talking about a new huge quarry being opened. The Minister may say that it is not really new if there has been extraction there since 1952, but the kind of extraction being proposed by RMC is new. That is one of the reasons why I believe that the application merits being called in.
I do not write to the Minister on every controversial planning matter and say that it must be called in. The records at the Department of the Environment, Transport and the Regions will show that it is very rare that I have said that. However, we are talking about a huge application beyond anything that I have dealt with before in my constituency. It is in the heart of the national park. I do not agree with every decision that the park has taken, and I have been critical of it in the past. I was pleased when parish council representatives were allowed to serve on the park authority, so that an elected element was included. I shall not go over the arguments, but I welcome the changes that have been made.
A bizarre aspect of the problem was highlighted by Julian Tippett of Stoney Middleton. He wrote to me:
it is bizarre that a consent given in 1952 can rule what is done 45 years later
without a planning inquiry of the kind that I think necessary for this application. I hope that the Minister will be able to deal with some of the points that I have raised.

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Nick Raynsford): I congratulate the hon. Member for West Derbyshire (Mr. McLoughlin) on his success in obtaining this Adjournment debate and on his speech on the future of quarrying at Longstone Edge. He is lucky to have such magnificent countryside as that part of the Peak district in his constituency. It is right that he should be extolling its beauty and defending its interests. He has raised a very important issue.
I know that the hon. Gentleman will understand that I must of necessity avoid commenting on the particular circumstances of an individual case, as it may come before the Secretary of State on appeal. Should an appeal be lodged with my Department on any planning matter, Ministers have a legal responsibility to all parties involved to act impartially and with an open mind.
As has been drawn to our attention, the Peak district national park authority, which is the mineral planning authority, is also considering enforcement action against the operator. I understand that it centres on the interpretation of the original planning consent to which the hon. Gentleman referred and the extent to which that consent allows for the removal of limestone. The enforcement process, too, involves a right of appeal to my Department and adds to the circumspection with which I must address the case.
I do, however, want to make it clear to the House at the outset that the Government recognise and understand the very real concerns raised locally about quarrying

and its impact on the environment. Successive Governments—not least those formed by the hon. Gentleman's party, as well as the current Government—have sought to respond to those concerns and to achieve a sensible balance between the interests of the economy and the construction industry on the one hand and the environment on the other. That is reflected in primary legislation. I shall return to the legislative aspect in detail later in my speech, as it is important to set out clearly the purposes of the reforms of recent years.
I must emphasise that the task of reviewing mineral planning permissions and of monitoring how they are worked and restored throughout their lives is one properly for local government to perform. It is the local mineral planning authority—in this case, the Peak district national park authority—and the quarry operator, in this case, RMC Roadstone Ltd., to which both government and local people rightly look for improvements.
As I said, the Government recognise and understand the passions that quarrying raises. As the hon. Member will know, in recent years, successive Governments have accorded the reform of old quarrying permissions considerable priority. I should like to remind the House of the progress that has been made.
The modern reform of the mineral planning system began as far back as 1976, with publication of the Stevens committee report. The committee's recommendations formed the basis of the Town and Country Planning (Minerals) Act 1981, which is now consolidated within the Town and Country Planning Act 1990 and is the cornerstone of modern mineral planning legislation.
The 1981 Act introduced a duty on mineral planning authorities—which, in current terms, are the counties, unitaries and national park authorities—to review and make orders updating mineral permissions, and established that the minerals industry should itself bear part of the costs under the "polluter pays" principle. However, the 1981 Act's provisions for review and updating of conditions did not work well in practice.
Mineral planning authorities were reluctant to risk incurring compensation liabilities that were difficult to assess in advance of using their order-making powers. The shortcomings of the 1981 Act were recognised. Consequently, two further pieces of legislation were enacted to address those shortcomings.
The first measure was the Planning and Compensation Act 1991. In that Act, the then Government legislated to reform interim development order planning permissions. Those are the earliest remaining mineral permissions in the United Kingdom and were granted under interim development orders between 1943 and 1948, chiefly to meet wartime needs and the demands of post-war reconstruction. Those permissions had few, if any, planning conditions attached to them, and in many cases records of their existence had been lost. Under the 1991 Act, IDO permissions had to be registered with local mineral planning authorities and then submitted to those authorities for updating of their working and restoration conditions.
All IDO permissions remain valid and cannot legally be revoked without compensation, which is consistent with the wider general principles of planning and property law. There is no compensation for the cost of complying with new conditions, but our planning guidance makes it clear that conditions imposed on active sites should not
fundamentally affect the economic structure of the operation.


For dormant sites—a site where there has been no substantial working for two years between May 1989 and April 1991—full modern conditions may be imposed without compensation. Full planning guidance is given on the operation of the 1991 Act in mineral planning guidance notes 8 and 9.
The reforms have worked well over the years, and they are delivering real benefits as older quarries are brought up to modern environmental standards.
The Environment Act 1995, to which the hon. Member referred, built on that earlier success and made provision for similar reforms to deal with permissions that were granted between 1948 and 1982. Those are known as old mineral permissions, and the Longstone Edge complex of quarries comes into that category. All OMPs are subject to initial review and updating of conditions. I am sure that the House will agree that it is important that, once modernised, mineral permissions do not slip back again. That applies to all permissions, not only to IDOs or OMPs. I am sure that no hon. Member would like to be confronted continuously with the issue.
The Environment Act 1995 therefore provides for periodic reviews—at 15-year intervals—of all mineral permissions, irrespective of the date on which they were granted, to ensure that, once modernised, they are kept in line with current environmental standards and best practice. That is a particularly important aspect of the reforms, and one that has clear benefits.
The initial review task for OMPs granted between 1948 and 1982 is much more substantial than that for pre-1948 IDOs, as the 1995 legislation covers permissions granted over nearly 35 years. Therefore, to spread the work load in bringing the old permissions up to date, the review of active sites is taking place in two consecutive phases, each of three years.
Phase I, which is now in progress, deals with sites where the predominant permission or permissions were granted before 31 March 1969. Phase II, which is due to begin in October 1998, will deal with sites where the predominant permission was granted after that date, but before 22 February 1982. However, all sites wholly or partly within national parks, sites of special scientific interest or areas of outstanding natural beauty are treated as phase I sites. That means that the most environmentally sensitive sites should have the protection of new conditions in the first half of the review programme.
Clearly, a number of old mineral permissions were granted on terms at least as broad as IDO permissions. Their lack of detail and limited operating conditions would not be allowed if they were being granted today. However, the permissions remain valid.
In the case raised by the hon. Member I well understand how frustrating it must be to residents of the area that old mineral permissions are, by today's standards, so loosely worded. That is why the review process is so necessary—to ensure that active sites, such as Longstone Edge, are worked under proper modern standards.
I emphasise that the review's purpose is certainly not to allow operators to exceed the terms of their original permission. On the contrary, the purpose is to ensure that old permissions are subject to modern-day operating and restoration conditions. For active sites, owners or

operators must submit new schemes of working and restoration conditions for the mineral planning authority's approval, by the date that it specifies.
The hon. Member for West Derbyshire asked about phased restoration. All reviews should impose proper restoration conditions, but the level of detail appropriate will vary according to the circumstances of the particular case. More detail should be provided for sites with a short life—for example, for sites where mineral operations will cease, or restoration is due to start, within five or 10 years of the review. For sites that will continue for a longer period, it may be preferable to have conditions that require the mineral operator to submit detailed schemes for final landforms and contours, and for the necessary aftercare when a particular operational phase has been reached, or by a set date.
There should also be provision to ensure that the mineral operator will propose and implement a scheme for final restoration and aftercare arrangements should the site cease operation for any reason before the end of the time limit. The precise details of the conditions are, of course, a matter for the mineral planning authority to determine in the first instance.
There is no compensation for new restoration and aftercare conditions, or for conditions that do not restrict working rights. Those include, for example, modern environmental conditions—such as wheel-washes and sheeting of lorries to provide for the cleanliness of roads leading to and from the public highway and of vehicles leaving the site.
The aim of the review process is to ensure environmentally sound outcomes while not prejudicing economic viability. Traffic conditions could therefore include control of access to and from the highway, display of on-site signs showing recommended vehicle routes and improvement of visibility where access roads join the public highway. Where such problems cannot be resolved, it may be appropriate to impose conditions limiting the rate of output, to preclude substantial future traffic increases, or prohibiting night-time working. Such conditions must be used flexibly. Those that significantly restrict the rate of output in such a way as to prejudice the quarry's economic viability to an adverse degree would give rise to liability for compensation.
The point on compensation is important. For modern conditions that restrict working rights, compensation will be payable only if, in the opinion of the mineral planning authority, the effect of the restriction would be such as to prejudice to an unreasonable degree either the economic viability of the operation or the asset value of the site. As ever in planning, the test is one of reasonableness.
Some quarry sites are dormant under the 1995 Act. They are sites where no substantial mineral working or substantial depositing of mineral waste has occurred between 1982 and 1995. Work cannot restart until a new scheme of full modern operating and restoration conditions has been approved by the mineral planning authority. There is no compensation for the cost of complying with conditions imposed on dormant sites.
The Department has published full guidance on how to operate the 1995 minerals reforms in mineral planning guidance note 14. That document was published after extensive consultation with industry and local authorities, and copies were supplied to all mineral planning authorities. It is a material consideration which must be taken into account when old permissions are reviewed.
As my hon. Friend the Minister for the Regions, Regeneration and Planning has made clear in correspondence with the hon. Member about the case that he has raised, the Peak district national park authority, as the mineral planning authority, is directly responsible for making progress on the matter. I hope that it will do so with application and imagination.
The 1995 Act seeks to maintain an equitable balance between the rights of those who hold long-standing valid planning permissions and the proper protection of the environment and amenity. In the Government's view, the way to proceed is for the Peak district national park authority to complete its review of the Longstone Edge permissions under the 1995 legislation and ensure that they conform to proper modern conditions. That would involve neither revocation nor payment of compensation, provided that the authority did not seek to impose conditions that restricted working rights to such an extent that the economic viability of the operation or the asset value of the site was prejudiced to an unreasonable degree.
I want therefore to make it clear that the Government stand by their decision not to call in this case, as the hon. Member requested. My hon. Friend the Minister for the Regions, Regeneration and Planning made it clear that the Secretary of State's call-in powers are used only sparingly. This is not a case where we believe that call-in powers are appropriate.
I also want to make it clear that the intrinsic landscape quality of any individual site does not justify the Secretary of State substituting his judgment for that of the local planning authority. Otherwise, the Secretary of State would end up determining every planning case in environmentally sensitive areas. The fact that the site is in a national park is not in itself a justification for call-in—

Mr. Deputy Speaker (Mr. Michael J. Martin): Order. We must move to the next debate.

Private Care Agencies

Mr. Colin Pickthall: I am grateful for the opportunity to put on the official record my deep concerns about the regulations surrounding private care agencies, which have grown in number in recent years and are of a weird and wonderful variety.
I was alerted to the problems to which poor regulations can give rise last year, when I received a petition from the residents of Eskbrook in Skelmersdale who were protesting about what they called "a reign of terror" that had been introduced into their quiet area by problem teenagers housed with their carers in a normal family home in their midst. The residents accused the youngsters of openly vandalising cars in the street, incessant abusive language and excessive noise in the early hours of the morning. In general, the residents described a lack of control being exercised by the carers.
I believed at the time that that was a very usual reaction to neighbourhood nuisance, which is a common complaint, and I took the usual steps of making inquiries of the police and the council. During the year, as I investigated the problem, it became obvious that it was much larger and had many more sides. It became clear, too, that the difficulties faced by the authorities, the company and the community had national implications.
The house in question is owned by a private company, Care Afloat, which operates from unit 3a, TPT Training, Railway road, Skelmersdale. I hasten to add that TPT Training has nothing whatever to do with this debate. The company buys or leases relatively cheap houses and advertises itself as
Specialists in emergency/respite care and personal development at sea".
It secures contracts with local authorities to care for young people with extreme behavioural problems.
The problem is that, under current regulations, there is no effective supervision or inspection of such homes by social services or other relevant regulatory bodies. Most, if not all, the young people are from other local authorities—sometimes a long way off. The social services department in the contracting authority cannot or does not effectively monitor the progress and condition of the young people for whom it should be responsible; the local authority in which the home is located does not have powers effectively to deal with the situation that it discovers is growing in its bailiwick. Mr. Danny Curran, who runs Care Afloat, says that he has to request the placing authority to visit or inspect, or it does not do so.
I have to hand a despairing memorandum from St. Helens social services—the neighbouring authority to my constituency—referring to another Care Afloat home in Cross Pit lane, Rainford. It says:
The latter address is a leased property accommodating up to three young people and as such falls outside the children's homes registration criteria. St. Helens Inspection Unit has been in contact with Care Afloat about a number of matters, but the home in Rainford is not registered with this local authority. Responsibility for checking the suitability and the safety of placements at Cross Pit Lane, therefore, rests with placing agencies.
I believe that Care Afloat is operating similarly in Trafford, Salford and Tameside.
Lancashire county council was not informed of the company by the placing authority, but the children and young people have come to its notice following


involvement of the police or me on behalf of affected constituents. The concern of Lancashire social services department has been communicated to other social services departments. Lancashire did at one time use Care Afloat but no longer does so. I know that there are substantial files on the problem at county hall in Preston, which are not accessible to me, but would, of course, be to the Minister.
Care Afloat is, I am quite sure, not alone in the United Kingdom in slipping through the net of care for young people. It generally caters for fewer than four young people in any one home and therefore falls outside the children's homes registration criteria and under the Placement of Children (General) Regulations 1991, which put the onus for checking the viability and safety of placements and responsibility for the supervision and welfare of the young people concerned on the placing agency. Care Afloat wants to open a house for four or more children and thus fall, as it were, deliberately into the ambit of inspection.
It is clear that local authorities that are a considerable distance away from—in this case—west Lancashire cannot supervise the home. They may be guilty of an out of sight, out of mind attitude, but whatever is the case keeping a firm grip on such arrangements presents an immense communication problem for the local authorities concerned and there is no doubt that young people can be very much at risk.
My hon. Friend the Minister will want to know why I am making a song and dance about this particular company. I have had substantial correspondence from and conversations with people who have worked for or worked close to Care Afloat. None wishes me to identify them, because they are frightened, so the evidence that I shall present on one side of the argument must be anonymous and anecdotal. Nevertheless, I know some of the informants well and believe that the allegations should be recorded.
I have had conversations with Mr. Danny Curran who runs Care Afloat and will refer to his arguments as I go along, but I must say that the allegations made against Care Afloat—whether exaggerated or not—must be listened to because, at the very least, they demonstrate what is possible under the current regulatory system.
Most of the children with whom Care Afloat deals have extreme difficulties. They are often the victims of abuse of one kind or another, which is presumably why their local authorities are happy that they are lodged as far away as possible. It follows that most of the children under 16 years old do not attend school, although I know of one child who attended a local school where considerable trouble was caused. The school could not deal adequately with the child because nobody was acting in loco parentis. In another case, a child with psychiatric difficulties was placed in the psychiatric ward of Ormskirk hospital. There was trouble and costs to the local authority, which were eventually recovered from the placing authority—in that case, Gloucester.
The young people are placed away from home without any reference to their health needs, which leaves the host health authority to pick up the consequences. Many accusations have been made about Care Afloat. I shall select one or two. There have been accusations of drug taking and of children being taken to parties and getting drunk in public. I must say that Mr. Curran denies that.

There have been accusations that one of the carers is a cocaine user. I must say that Mr. Curran vehemently denies that, but the lack of inspection and control leaves the organisation open to such a charge.
Worries have been expressed about the seaworthiness of the boats that Care Afloat uses. One boat is used to sail the Irish sea and was at one point demasted off the Isle of Man. Mr. Curran tells me that the boats are regularly spot checked by the Royal Yachting Association. The placing authority and Lancashire county council have no locus in that.
I have a list of faults with another of the boats, drawn up by a boat builder and repairer. After 17 or 18 complaints, it concludes:
it is my opinion that this boat is unsafe to operate…I would strongly advise that the rest of the boat is examined by a qualified surveyor or boat safety examiner with a view to such points as ventilation, labelling, fire extinguisher type and the location and storage of the petrol generator and the full gas bottle—currently to be found in the shower!
Challenging young people through boating or sailing is an excellent idea in principle, but the inherent dangers are obvious. The care and inspection of that part of the enterprise should be very tight.
The greatest concern is the fact that a substantial proportion of the staff have no qualifications or experience. Mr. Curran says that the figure is 25 per cent. and tells me that Care Afloat has put together a training programme to put that right. I spoke this morning to a woman who, as a student, started as a voluntary helper with Care Afloat. From the first day, she was put in charge of a young sex offender who was under a specific work order not to be left with a single carer. She was left alone with him and her complaints were ignored.
In fairness, Mr. Curran has told me that he is entirely in favour of his houses being properly regulated and inspected by the local authority. Furthermore, he believes that the service should be in the public sector. He has represented those views to Lancashire county council. However, the allegations laid against Care Afloat illustrate what is possible, or even likely, in the private care system. It is wrong that any local authority should place its problem children a long way away and neglect proper, regular monitoring. It is wrong that the host authority has no role in checking what goes on in those houses if there are fewer than four children. It is wrong that, if a private care company asks for voluntary registration—as this one did—local authorities cannot undertake that responsibility.
I do not suggest that Care Afloat wishes to damage the children in its charge, but, given the absence of proper controls, it would be remarkable if staff who intended harm did not appear in private care companies. We know how difficult it has been to keep them out of the regulated sector, never mind the non-regulated sector. Those shortcomings must be put right before there is a horrible calamity somewhere.
Care Afloat's case must be heard. It says that it would welcome registration and inspection, which would bring structural support to the business. It has constructed a management strategy emulating the terms of formal registration. The changes to regulations that I seek would help such organisations to discipline themselves properly and become acceptable to their communities.
I note the agenda for action proposed yesterday or the day before by the National Association of Inspection and Registration Officers. It says:
Arrangements should be made to extend the remit of social care regulation to include vulnerable service users of: small children's homes, domiciliary care agencies, day centres for adults and supported housing schemes.
Quite so. I could mount a similar Adjournment debate about private domiciliary care in west Lancashire. NAIRO goes on:
Clear and consistent guidance must be given on whether the role of regulation is simply to 'police' minimum standards, or whether it has a wider role to develop quality of care and quality of life.
The latter should surely be the goal of this Government of all Governments.

The Parliamentary Under-Secretary of State for Health (Mr. Paul Boateng): I am grateful to my hon. Friend for securing time to debate this important issue. The provision of good-quality social care in the public or the private sector is a priority for the Government. We shall take forward that agenda through the promotion of good practice and by challenging poor practice. We look to the joint reviews of the Audit Commission and the social services inspectorate to assist us in taking forward that important task.
My hon. Friend has raised concerns about the role of private care agencies, referring specifically to Care Afloat, that are worthy of careful consideration. We shall ensure that they are given that careful consideration. Those who have responsibility in county council social services departments will be apprised of my concerns through Her Majesty's chief inspector. We shall also ensure that a record of those concerns and my hon. Friend's speech is forwarded to the director of social services and to those charged with licensing adventure activities.
There are two parts to my hon. Friend's concerns. The greater part relates specifically to the quality of residential and social care provided to the young people placed under the responsibility of Care Afloat. The other relates to the operation of its adventure activities, its vehicles and the training given to those who use them to provide such challenging care. It is vital that both those concerns are considered by the appropriate authorities.
My hon. Friend brings considerable experience to the topic as an active constituency Member of Parliament and, importantly, having spent a professional lifetime in education, concerned intimately with the welfare and care of young people. That lends added weight to his concerns, as does the care and attention that he has clearly applied to gathering his evidence and to testing out those concerns with the proprietor of Care Afloat.
In due course, the Government will bring forward a series of measures designed to take forward the three important areas that my hon. Friend has mentioned. The first is the need for proper regulation. The second is the need for the statutory authorities to pay particular attention to the services that they provide for children in their care. When the state has responsibility for the care of children, it has a particular responsibility to be a good parent. As my hon. Friend has highlighted, many of the young people subject to care orders have been the objects

of abuse and neglect, and they need concerted remedial action if they are to be brought to maturity with the benefits of the stable and secure upbringing that they ought to have.
The third area my hon. Friend mentioned was how services could best be provided and how standards could be improved. We believe that the current system for regulating social services does not adequately protect the interests of people who rely on social care. We will set out a new system for regulating social care in a White Paper in the spring and we will introduce a system that is tough, transparent and accountable. The new regulatory arrangements will be independent of local authorities and health authorities and remove any possible conflict of interest with in-house provision and the commissioning of services, and allow greater confidence in the system.
The new system will be comprehensive. It will tackle domiciliary care, which my hon. Friend touched on in his closing remarks. That, too, is currently outside the ambit of regulation, but that should not be the case. My hon. Friend also mentioned the particular instance of children's homes with three or fewer residents. It is vital that they are included in the statutory arrangements. Had that been the case with Care Afloat in Lancashire, the organisation would have been subject to regular and proper inspection. As it is, it has not been.
We will also bring local authority provision within the ambit of statutory regulation. In both the public and private sector, abuse has unfortunately been a fact of life for all too many young people. We must ensure that all young people have the full protection that the law and proper regulation can afford.
We must also ensure that we identify good practice, challenge poor performance and offer assistance in achieving good quality, where the knowledge and skills of the Department of Health and the social services inspectorate can be of assistance. The White Paper will also set out our proposals for a general social care council. We will consult widely on that, and work has already begun in preparation for the White Paper. The exact remit of the council is yet to be decided, but it will set standards for conduct and practice for people working in social care. It will also have responsibility for improving standards in social care services and for ensuring that those services enjoy the confidence of our most vulnerable fellow citizens. We must ensure that the concerns of users, carers and the wider public—not simply those of narrow professional interests—are taken on board by the council.
Children in public care, whether care is provided in the public or the private sector, need to rely on the context in which that care is provided for their safety and security. Sir William Utting's report on safeguards for children living away from home has recently been published and, on 19 November, my right hon. Friend the Secretary of State for Health made a statement in the House on the Government's approach to it. Under my right hon. Friend's chairmanship, a ministerial task group has been set up to prepare the Government's detailed response to the Utting report. The task group will be concerned to ensure that high standards are set and met.
My hon. Friend made clear in his speech the urgency of the work that the Utting report has set in train; we cannot be complacent about the number of children and young people who are currently at risk. That is why we shall drive the agenda forward, especially with regard to the regulation of small children's homes.
Statutory responsibilities already exist under the Arrangements for Placements Regulations 1991 and the Review of Cases Regulations 1991 for placing authorities to ensure that the placement is appropriate and that regular reviews are carried out. The authorities should satisfy themselves that the home will meet the full range of the needs of the child, including health and education arrangements, and that police and other checks have been carried out on staff in the home.
I have in mind especially the concerns that my hon. Friend raised about the alleged abuse of drugs by at least one staff member of the home that he mentioned. If that has resulted in a criminal conviction, it is a serious matter and those who have a responsibility for placing children and young people with any such organisation should fulfil the requirements placed on them by the regulations I have mentioned. It is a matter for the gravest concern if that has not been done. Out of sight, out of mind is not an acceptable approach for any local authority to take when it places vulnerable children and young people with an organisation. If that has occurred with Care Afloat, it is a serious matter and I will ask the chief inspector of social services to look into the matter in conjunction with the relevant county and district councils to ensure that there has been proper compliance with the regulations.
In conclusion, I shall make one or two remarks about the provision of high-quality services by social services departments, because they often have the most vulnerable children in their care. We are concerned to ensure that high-quality services are provided cost effectively. We have no problem with a mixed economy of care. The issue is whether the service meets users' needs and is an effective use of the resources available to social services departments. We are concerned about the organisation that my hon. Friend mentioned because it currently runs outside the regulatory structure. We want to address that. That is our concern—not the fact that the organisation works in the private sector. Some good,

innovative work is being done in the private sector and we value its contribution to the care of children and young people.
We are also committed to the principle of providing care of the highest standard in a context that addresses the concerns raised by my hon. Friend about the distance of homes from the original homes of the young people involved. My hon. Friend is fortunate in representing one of the most beautiful parts of England which has a challenging environment in which it is possible to provide a specialised service for children and young people. Having said that, it is wrong to remove children and young people from the structures that would support their development and important to ensure that they are not out of sight, out of mind.
My hon. Friend has done his constituents a service in raising this issue. I hope that he is satisfied that the Government will act on the concerns that he raises. He has enabled the House to address one of the most important areas of its responsibilities—the social care of children and young people, who are the very people who make up the future that holds out the best hope for this country and us all. For that, the House owes him a debt of gratitude.

It being Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Sitting suspended, pursuant to Standing Order No. 10 (Wednesday sittings), till half-past Two o'clock.

BILL PRESENTED

SCOTTISH AGRICULTURAL COLLEGE ORDER CONFIRMATION

Mr. Secretary Dewar presented a Bill to confirm a Provisional Order under section 7 of the Private Legislation Procedure (Scotland) Act 1936, relating to the Scottish Agricultural College: And the same was read the First time; and ordered to be considered on Tuesday 9 December, and to be printed [Bill 93].

Oral Answers to Questions — WALES

The Secretary of State was asked—

Welsh Assembly

Mr. Forth: What representations he has received regarding the establishment of a Welsh Assembly. [17470]

The Secretary of State for Wales (Mr. Ron Davies): I have received numerous representations in the form of letters both to myself personally and to the Welsh Office, many telephone calls to the Assembly information line and e-mails to the Assembly website. We did of course have a referendum on 18 September, and I am pleased to remind the right hon. Gentleman that the people spoke for themselves when they voted for the creation of a Welsh Assembly.

Mr. Forth: Now that the city fathers of Cardiff seem to have lost interest in having the Assembly in their city, what reassurances can the Secretary of State give to the nervous taxpayers of Wales that, in his increasingly anxious search for a location for the Assembly elsewhere in Wales, they will not be expected to pay ever-increasing amounts to prop up his incompetence?

Mr. Davies: I can assure the right hon. Gentleman that there is no question of such a thing happening. The financial memorandum attached to the Bill that was published last week made it absolutely clear that the Government intend to stick to the pledges given in the White Paper. There is no anxious search for an alternative location. The right hon. Gentleman will be pleased to receive tomorrow a copy of the consultation document that I intend to produce to make clear the Government's options.

Mr. Alan Williams: Will the Secretary of State give full weight in his considerations to the fact that he could come to Swansea at a fraction of the cost of staying in Cardiff? Will he bear in mind the fact that it is a matter not only of property values but of the fact that the guildhall in Swansea needs absolutely no refurbishment and could literally be moved into at a week's notice? Will he further bear it in mind that we in south-west Wales welcome the chance to benefit from the one piece of inward investment that is completely within his personal control?

Mr. Davies: I am sure that my right hon. Friend and I both appreciate the delicious irony in his arguing the case for the Assembly to be located in Swansea. I was pleased to receive a letter from him in which he said that the people of Swansea wanted an Assembly—to be located in Swansea.
Swansea has made a powerful case. As I said a moment ago, I am about to issue a consultation document; Swansea features prominently in it and I have no doubt that my right hon. Friend, his colleagues, the people of Swansea and the local authority will continue to make their own powerful case.

Mr.Livsey: How many representations has the Secretary of State received from the farming

communities—I am sure that he has received some—in favour of a Welsh Assembly, and what does he intend to do about the current crisis in agriculture, which I am certain—

Madam Speaker: Order. We are dealing with the Welsh Assembly. The hon. Gentleman is bringing up a totally different matter.

Mr. Davies: I have received many representations from the National Farmers Union and the Farmers Union of Wales in favour of a Welsh Assembly. I believe that they understand that, when we have our own democratic form of government in Wales, we will be able to address the problems that beset all those who live and work in the countryside. It might be of interest to the hon. Gentleman to know that I will meet representatives of both the National Farmers Union and the Farmers Union of Wales later this afternoon; I am sure that we will discuss the impact of the Assembly, among other matters.

Mr. Barry Jones: My right hon. Friend has let the names Cardiff and Swansea cross his lips this afternoon. May I mention Alyn and Deeside and invite him to consider seriously locating the Assembly in my constituency at the new, large modern offices at Ewloe, owned by Flintshire county council? Such consideration would be most gratefully received.

Mr. Davies: It is certainly the case that Ewloe was one of the locations which we considered in the initial search for a suitable location for the Welsh Assembly. I must disappoint my hon. Friend because it is not the firmest of favourites in the consultation document. I understand the concern that the people from the north of Wales have expressed, and it is my intention to make it clear in the consultation document that there will be an opportunity for the people of north Wales, in common with people throughout Wales, to have access to the Assembly.

Mr. Shepherd: Surely the greatest representation that the right hon. Gentleman has received in respect of such matters is the decision of 75 per cent. of the Welsh electorate who did not support the Welsh Office proposals. Would not the best solution be to consign the powers that the right hon. Gentleman wishes to use to Welsh elected Members of Parliament, who could discharge those responsibilities without any further burden being placed on the taxpayer of Wales?

Mr. Davies: I am afraid that the hon. Gentleman has got it wrong—75 per cent. of the people of Wales did not oppose the creation of the Assembly. If we were now to set aside those proposals, the Labour party and the Government would be breaching their election manifesto and we would be breaching the commitment given by the House when we passed the referendum Bill to introduce a Bill to provide for the democratic settlement of government in Wales. We would thus betray the people of Wales who fought and voted for a referendum on the basis of the regulations laid down by the House.

Mr. Rhodri Morgan: Can the Secretary of State confirm that the essential nature of the choice before him and his opposite number, the Secretary of State for Scotland, is between a high-tech, palace of technology Parliament in a brand-new building—free of VAT,


of course—or a Parliament converted from an historic traditional building, such as Cardiff city hall? Perhaps in the hearts and minds of the Welsh people, and even perhaps in the heart and mind of my right hon. Friend, that building is the nearest thing that we have in Wales to Big Ben and this Palace.

Mr. Davies: As I have said publicly before, and I repeat to my hon. Friend that Cardiff has always been the obvious choice for the location of the Assembly, and city hall has always been my preferred location for it. I am determined that if we acquire city hall, it must be at the right price and not at any price. I can assure my hon. Friend that the case that he has put has been considered. Indeed, I will answer his question tomorrow when I produce the consultative document to which I have already referred.

Mr. Ancram: Will the Secretary of State confirm that any additional cost of establishing the Assembly arising from the incompetent way in which he and his colleagues have handled the project, not least by failing after 18 years to find a home for the Assembly, will come out of the Welsh mainstream budget, which would otherwise be spent on important sectors such as housing and education? Indeed, the Welsh section of the Confederation of British Industry fears that the cost will be met out of money that might otherwise go towards economic development. Should not the right hon. Gentleman apologise to the people of Wales for not having resolved such problems before the referendum, and thus for having sold the referendum to them on a false prospectus?

Mr. Davies: I really do not understand the case that the right hon. Gentleman is trying to put. I fail to see how the present Government are responsible for the sins that his Government and his party visited on Wales in the past 18 years. It is a travesty for him to talk about the time scale when he had the opportunity to preside over a change in democratic relationships not only in Wales but throughout the United Kingdom when his party enjoyed power in the House of Commons.
I have already made it absolutely clear that the financial memorandum attached to the Government of Wales Bill spells out the cost of providing a home for the Assembly. It is my determination to keep within that financial limit, which subsequently led to Cardiff city council rejecting my offer to acquire city hall. Is the right hon. Gentleman now suggesting that I should acquire that building at a price greater than the independently assessed market value reached by the district valuer? Is that what he is suggesting? Would that be equivalent to safeguarding public finances?

Mr. Ancram: Does not this indicate that it would be a far better use of the Secretary of State's time if, instead of dogfighting with his socialist colleagues on Cardiff county council about Cardiff city hall, he explained to the people of Wales how an Assembly might in future be able to help the hard-pressed farmers of Wales, who are suffering grave dangers to their livelihood and who need more than the patronising arrogance that they have had from him over the past three days?

Mr. Davies: I fail to see how my statement condemning the illegal actions of farmers from Wales and

anywhere else in this country in seizing and dumping legally transported goods is patronising arrogance. Is the right hon. Gentleman seriously suggesting that the illegal action taken by people in Holyhead and elsewhere in Wales over the past two or three years is action that he defends? The fact of the matter is that the Government are prepared to sit down and listen to the farmers of Wales, England, Scotland and Northern Ireland and that is precisely what I shall be doing at 3.30 pm today. The right hon. Gentleman is betraying the interests of this country by stirring up the sort of illegal action that he is now suggesting he supports.

Child Care

Ann Clwyd: What actions he will take to develop a child care strategy following the Utting report. [17471]

The Parliamentary Under-Secretary of State for Wales (Mr. Win Griffiths): In addition to work already under way involving the Adrianne Jones report, the Welsh Office and the Department of Health will be developing a full programme of policy and management changes in the context of a strategy for residential child care to ensure that children living away from home are properly safeguarded. My right hon. Friend the Secretary of State for Health set out the Government's initial response to Sir William Utting's report in a statement to the House on 19 November. That outlined the action that is already under way and announced our intention to consult widely and establish a ministerial task force that will prepare a full Government response.

Ann Clwyd: I am glad to hear that news from my hon. Friend, especially after 18 years of inaction by the previous Government on this issue. There were 12 internal inquiries in one county alone, yet no action was taken by the Welsh Office, so I am pleased to hear that such vigorous action is being taken now. Many of my constituents who were abused in north Wales have given evidence to the inquiry. The alleged abusers have been kept anonymous within the inquiry. Can my hon. Friend give an assurance that none of those people who have been named at the inquiry but whose names the public do not yet know are currently working with either children or young people?

Mr.Griffiths: As far as I know, that is the case, but I shall double check given the real concern expressed by my hon. Friend about that issue. I assure her that, even while the inquiry is going on, we are looking very carefully at all aspects of children's services. We realise that this is a serious and important problem, which has been left to lie unattended for far too long.

Welsh Assembly

Mr. Ruffley: When he plans to publish the Bill setting up an Assembly for Wales. [17472]

Mr. Ron Davies: The Government of Wales Bill was published on 27 November. The Second Reading debate will take place next week and I hope that Royal Assent will be granted by the summer.
In the interim, I have decided to appoint an advisory group to consider the standing orders and other procedures of the Assembly. We want a dynamic,


modern and inclusive institution, fit for the new millennium. I am pleased to announce that John Elfed Jones, a distinguished figure in Welsh business and public life, has accepted my invitation to be the chairman of that advisory group.

Mr. Ruffley: Will the Secretary of State explain why he believes that the bulk of the Committee stage of the Bill should be taken away from the Floor of the House? Does he stand by his earlier comments to the effect that Members of Parliament would not be interested in the detail of the Bill?

Mr. Davies: The handling of the Bill is a matter for the Government's business managers and I understand that the usual channels are now considering the matter.

Mr. Bercow: Oh?

Mr. Ruffley: Are they?

Mr. Davies: Perhaps the hon. Gentlemen should discuss it with their own usual channels. It is and always has been my view that adequate time should be provided on the Floor of the House to debate, not only Second Reading, but key contentious clauses. It is also my view that many matters of detail in the legislation will be of particular concern to Welsh Members and would be best discussed in Committee. I should point out that, were the Bill to be referred to a Standing Committee of the House, inevitably Members of Parliament representing English constituencies would have to sit on that Committee, because there are no Conservatives representing Welsh constituencies.

Mr. Donald Anderson: Will my right hon. Friend advise whether there is a Welsh word for Bourbon, since the Conservative party appears to have learnt nothing and forgotten nothing since it emerged from the election with no Members in Wales and also suffered a defeat in the referendum? Will he assure the House that he will consider seriously the Swansea, Aberystwyth, Mold option for the site of the Assembly, which would not only avoid the centralisation of Cardiff but reflect the diversity which is part of the joy of our Wales?

Mr. Davies: Many Welsh words readily come to mind to describe Conservative Members, but I must confess that my knowledge is not sufficiently comprehensive to give the Welsh translation of Bourbon. However, I can assure my hon. Friend that his proposition, and that for Swansea, are in the consultative document which I shall publish tomorrow.

Mr. Llwyd: Now that the Bill has been published and we are aware that agriculture will be one of the core responsibilities of the forthcoming Assembly, I remind the right hon. Gentleman that there is a huge crisis in Welsh agriculture, so when he sees the unions this afternoon, will he not rule anything out? In particular, will he urgently consider agrimonetary compensation and hill livestock compensatory allowances? Surely now is the time to act, not listen.

Mr. Davies: We have to listen, of course, as the hon. Gentleman will understand. Everyone understands the

particular difficulties that face the agriculture industry. There are problems that are associated with the high level of the pound at the moment and there is the backlog following 10 years of Conservative failure to deal with the BSE crisis. That has undermined the domestic market and is leading to imports on an unprecedented scale and the inability of British agriculture to compete by exporting its products. Those are matters which I shall be discussing with the representatives of British agriculture. I understand their concerns and I shall listen carefully to what they have to say. Any response will have to be made between the respective Secretaries of State for Northern Ireland, for Scotland and for Wales and the Minister of Agriculture, Fisheries of Food in conjunction with the Treasury. However, I shall most certainly listen carefully to the case that is put to me later on today.

Mr. Wilkinson: In the consultative document that will help those who are involved with the legislative process of the Government of Wales Bill, will the right hon. Gentleman consider locating the Assembly on two sites on the European model, one in the north to please the hon. Member for Alyn and Deeside (Mr. Jones), and one in the south to please the hon. Member for Swansea, East (Mr. Anderson) and the right hon. Member for Swansea, West (Mr. Williams), and perhaps, on the Luxembourg model, with a secretariat in mid-Wales in between?

Mr. Davies: I have never identified the hon. Gentleman as a particular advocate of things European before, so I take the suggestion that he is now making with a pinch of salt. Propositions in the consultative document will show that it is possible to create an Assembly with one permanent home but accessible and available to people wherever they live throughout Wales. I trust that when the document is published tomorrow the hon. Gentleman will go to the Library, get a copy and let me have his response.

Mrs. Ann Winterton: What estimate he has made of the costs of the proposed Welsh Assembly. [17473]

Mr. Paterson: If he will make a statement on the cost of the Welsh Assembly. [17479]

Mr. Ron Davies: The costs of setting up and running the Assembly are set out in the explanatory and financial memorandum to the Government of Wales Bill, which was introduced in the House on 26 November.

Mrs. Winterton: Last week, the Secretary of State described Cardiff's Labour-controlled city council as "profoundly wrong and misguided" in declining the financial package on offer to base the Welsh Assembly at Cardiff city hall. However, is it not the right hon. Gentleman himself who is profoundly wrong and misguided in creating a situation where Cardiff and Swansea are at each other's throats by foisting on the people of Wales a job-destroying and expensive bureaucracy which at least three quarters of them did not support in the recent referendum?

Mr. Davies: With the greatest respect to the hon. Lady, I think that she fails to understand the issues. No one has foisted an Assembly on to the people of Wales.
In the general election in May 1997, the people of Wales rejected the Conservative party in its entirety. Only the Conservative party stood for the status quo. Every Member of Parliament elected for a Welsh constituency in May 1997 was elected on the basis of supporting constitutional change. In September, in a referendum, the people of Wales had the opportunity, very specifically, very directly, to approve those proposals. They did so, and it is my responsibility to ensure that that legislation passes through the House of Commons; I will fulfil that responsibility.

Mr. Paterson: The referendum showed that an overwhelming majority of Welsh people do not want the Assembly. Will the Secretary of State please explain why £100 million over four years is better spent on a talking shop for superannuated county councillors than on front-line services such as health, schools or—topically this week—Welsh farmers?

Mr. Davies: The hon. Gentleman's comments are as offensive as they are irrelevant. In September this year, the people of Wales had the opportunity to vote on the Government's proposals. The rules for the referendum were laid down by Parliament. The people of Wales followed those rules, the referendum was won and, on that basis, the Government of Wales Bill will pass through Parliament.

Inward Investors (Jobs)

Mr. Hanson: How many jobs have been announced by inward investors in Wales since January 1996. [17474]

The Parliamentary Under-Secretary of State for Wales (Mr. Peter Hain): Since January 1996, the Welsh Development Agency has recorded inward investment projects which promise 21,678 new jobs and 6,890 safeguarded jobs.

Mr. Hanson: Will my hon. Friend join me in welcoming inward investment since the general election in Flintshire, in Wrexham and throughout Wales, which has been proved a tremendous success for our local economy? Will he take it from me that Labour's positive attitude in Europe has helped inward investment, while our policies on a minimum wage, on devolution and the social chapter have not proved the deterrents that Opposition Members believe them to be?

Mr. Hain: Indeed, as the record of inward investment since the general election shows, the debate on this matter has been divorced from reality. The real competition is not internal, with the rest of Britain, but external, with the rest of Europe. I invite those critics, including Conservatives, to join the Government and the Welsh Development Agency in batting for Britain instead of seeking to promote a squabble within Britain.

Mr. Bercow: Does the Minister believe that 60 additional politicians in a Welsh Assembly will help to bring a single inward investment project to Britain that would not in any case have been secured?

Mr. Hain: The answer is yes, and the people of Wales—and Welsh business—agree with the Government

in that answer. The Welsh Development Agency and Welsh business, including the CBI, wants an Assembly to give Wales a platform and a voice in Europe and internationally, to win jobs for Wales.

Mr. Rowlands: Is my hon. Friend aware that one of the most important sources for inward investment has been south-east Asia? Given the economic problems arising in south-east Asia, will my right hon. and hon. Friends take time to try to safeguard the investments that are vital to jobs in all our communities?

Mr. Hain: The answer is yes. The developments in south-east Asia have been extremely troubling and we are taking every action that is needed.

Mr. Evans: Britain has always done well out of inward investment and Wales has done especially well, attracting into the Principality one fifth of inward investment. However, has the Minister estimated how many extra inward investment projects will need to come about to make up for the loss of jobs in Welsh farming? Irrespective of what he and the Secretary of State for Wales say, many jobs will be lost. One commentator says that Welsh farming is bleeding to death. That is a result of the policies of the Minister and of the Government; high interest rates are sucking in cheap imports. With their policies, the Minister and the Government are helping to kill off Welsh farming. What are they going to do about it?

Mr. Hain: The Conservatives attacked Welsh farmers year after year. They failed to deal with the BSE crisis and to provide a platform for Welsh fanning. We are dealing with the consequences of their dreadful and shameful record.

Mr. öpik: Does the Minister agree that the agricultural elements of Wales are suffering desperately due to the Conservative legacy of BSE and the export ban? Does he further agree that the Government must now reinstate proper funding and finance to reinvest in the ailing agricultural industry in Wales?

Mr. Hain: Much of what the hon. Gentleman said is right. That is why my right hon. Friend is meeting the farmers' leaders this afternoon to discuss their concerns and to see whether we can find a way forward.

Housing Developments

Mr. Clappison: What plans he has to ensure that housing developments in Wales are restricted to brown-field sites. [17475]

Mr. Win Griffiths: "Planning Guidance (Wales) Planning Policy" of May 1996 stresses that full and effective use should be made of land within existing urban areas. The use of appropriate vacant land within urban areas for housing development can assist regeneration and relieve pressure for development in the countryside.

Mr. Clappison: 1 hope that the Government will not aggravate their problems with Cardiff city council by seeking to locate the Welsh Assembly on a green-field


site. What proportion of new housing in Wales does the Minister think can be built on previously developed brown-field sites? What is his target?

Mr. Griffiths: At the moment, more than half of all housing being financed by Tai Cymru—Housing in Wales—is being built on brown-field sites. Earlier this year, I asked local authorities in Wales to consider creating green belts where they had particular evidence of urban sprawl. We are doing everything possible to ensure that brown-field sites in Wales are utilised to the full. [Interruption.]

Madam Speaker: Order. I hope that hon. Members are sitting comfortably. I was watching what was going on.

Spending Levels

Mr. Flight: If he will make a statement on per capita spending levels in Wales. [17476]

Mr. Hain: In 1996–97, control total expenditure within the Welsh Office's area of responsibility was £2,348 per head.

Mr. Flight: How does that compare with spending per capita in England? If, as I suspect, it is some 25 per cent. higher, will there be a fair apportionment of spending between the people of England and of Wales when the minority of Wales has its Assembly?

Mr. Hain: Talking about fair comparisons, the hon. Gentleman's constituency in south-east England receives 14 per cent. more than the average GDP per head for England. In Wales, GDP is 18 per cent. less than the English average and the figure has got relatively worse over the past 20 years. Personal income is 17 per cent. lower and has got worse. Unemployment, poverty and health are all worse. In view of the shameful Tory record, the hon. Gentleman should be grovelling instead of griping.

Mr. Gareth Thomas: Does my hon. Friend agree that the establishment of a Welsh Assembly provides a much-needed opportunity to formulate an economic strategy for Wales and to address the prosperity gap to which he referred?

Mr. Hain: I very much agree with my hon. Friend. For the first time, a Welsh Assembly will be able to address the real needs of Wales—north and south, east and west; in both poor and well-off areas—to develop a coherent economic strategy for Wales. Some weeks ago, I published a document on that matter, setting out the basis for a debate so that we can progress to a high-quality, world-beating economy in Wales.

Regional Economic Development

Mr. David Heath: What discussions he has had with representatives of local government in the south-west of England concerning regional economic development. [17477]

Mr. Ron Davies: I have had no such formal discussions myself. My right hon. Friend the Deputy Prime Minister

will, however, be announcing later today the Government's proposals for regional development agencies in England. I am an enthusiastic supporter of that development. I hope that they will be as successful in England as the Welsh Development Agency has been in Wales. I know that the hon. Gentleman will want to join me in congratulating the WDA on its latest success in getting a multi-million-pound investment in Ebbw Vale by Yuasa Battery, which will create a further 148 new jobs.

Mr. Heath: Given that, on our side of the Bristol channel, we do not have the advantage of a Secretary of State, or of a new assembly, or yet of a regional development agency, will the Secretary of State give me an assurance that he would not countenance any inducements being given to move companies from areas of high unemployment in the west country to areas of low unemployment in Wales?

Mr. Davies: There is no suggestion that this Government would ever be party to such a development.

Mr. Llew Smith: I welcome the Secretary of State's announcement about new jobs in the Ebbw Vale community. Does he recognise that the Welsh Office's preferred option for the A465 Heads of the Valley road will run through the Rassau industrial estate and could affect the future development of that factory? Would the Secretary of State or one of his Ministers be willing to meet and discuss the matter with the local authority?

Mr. Davies: I have already had meetings with Yuasa Battery and with representatives of my hon. Friend' s local authority. I am aware of the difficulties that the company perceives, but it is my understanding that the present development can go ahead, with the aligned road proceeding as planned.

Oral Answers to Questions — PRIME MINISTER

The Prime Minister was asked—

Engagements

Dr. Tonge: If he will list his official engagements for Wednesday 3 December.
Does the Prime Minister—[Interruption.]

The Prime Minister (Mr. Tony Blair): This morning, I had meetings with Cabinet colleagues and others. Later this afternoon, I shall have a meeting with the Prime Minister of Italy.

Dr. Tonge: I apologise to the House, Madam Speaker.
Does the Prime Minister accept that yesterday's local government settlement will inevitably mean that local councils will have to take money from the elderly and the disabled, and that next year's council taxes will be the highest on record?

The Prime Minister: Under our proposals, an extra £1 billion is going into education—more than the hon. Lady's party sought—and an extra £350 million for community care. We are making the funding of councils


fairer, but yes, there is a limit on the amount of resources that we are able to put in. The hon. Lady and her party call for more money for health, education, local government, the coal industry, transport and the environment, and all that is to come out of 1 p extra on the standard rate of tax. They also want the programme for the young unemployed, but they do not want the windfall tax. All I can say is that it must be the longest "p" in history.

Siobhain McDonagh: Does my right hon. Friend share the anger of my elderly constituent, Mrs. Goldsmith, whose husband is in a coma in hospital, as a result of suffering a heart attack brought on by the distress caused to him by bricks being thrown at his window by young people, some of whom were as young as nine or 10? Will my right hon. Friend take this opportunity to reaffirm to the House and to the country, as well as specifically to Mrs. Goldsmith, that his Government will do everything in their power to reduce the time that it takes to bring young and persistent offenders to justice?

The Prime Minister: Certainly, I can confirm that to my hon. Friend. The Goldsmith family have my deepest sympathy, and the sympathy of all in the House. They are, unfortunately, not alone in the plight that they suffer, which is why the Government are determined to take action not just in cutting the time that it takes to get persistent young offenders to court but in dealing with the fact that youngsters, sometimes under the age of 10, are out late at night with no proper parental supervision. We are determined to put an end to that, in the interests of our elderly people and safety in our communities.

Mr. Ashdown: Leaving aside for a moment the fact that the Prime Minister seems to be as good this week as he was last week at misrepresenting the Liberal Democrat position on the basis of what he well knows to be an inaccuracy, I turn to a different—and perhaps even more serious—subject.
I have no wish to anticipate the details of the statement to be made later on bovine spongiform encephalopathy, but will the Prime Minister at least confirm that he knows and understands that a decision to ban beef on the bone at this stage will come as a bitter and terrible blow to a beef industry that is already reeling from recent events? Will he confirm that the paramount necessity to take whatever steps are required to preserve public safety will be applied equally not just to British beef but to imported beef?

The Prime Minister: I understand the plight that the beef farmers face at the moment and how great a blow this must be to them. However, when we receive scientific advice and the chief medical officer makes certain recommendations, we feel obliged to follow them. We shall do everything we can to mitigate the problems that farmers face. I confirm to the right hon. Gentleman that we would expect the same conditions to apply to any beef that is imported into this country.

Mr. Ashdown: I am grateful to the Prime Minister for that reassuring answer, and I am particularly grateful for his statement that he will do anything he can to compensate and assist farmers. I remind him that there is a great deal of unclaimed money in the European Union.
It would be especially helpful at this stage if the Government were to claim that, because of the high rate of the green pound and the damage that it is doing. Has the time not now arrived when we should have, once and for all, a proper public inquiry into the whole miserable mishandling of this affair by the previous Government?

The Prime Minister: We shall make a statement later about an inquiry into BSE and the handling of that issue in the past few years. This year, with the over-30-months scheme and other measures, some £1.4 billion will be spent on providing support. The problem with asking for more money from Europe is that, as a result of the abatement scheme agreed under the previous Government—which is, on the whole, a good thing for Britain in terms of the rebate that we receive—£71 out of every £100 that we receive must come from the British Exchequer. We obviously must take account of that when making any such application.

Mr. Borrow: Does my right hon. Friend agree that the appointment this week of the Independent Commission on the Voting System is an important part of the programme to modernise the British Constitution? When is the commission likely to report and when will the referendum be held? If the referendum finds in favour of an alternative to the first-past-the-post system and if the Parliament runs to its full five-year term, will it be possible to have that alternative system in operation at the next general election?

The Prime Minister: The answers to those questions must await the outcome of the commission, although I expect it not to take an overdue amount of time in reporting. I am very pleased that it has been set up, in fulfilment of the pledge that we gave at the election.

Mr. Peter Atkinson: Does the Prime Minister recall writing an article that appeared in the Evening Standard of 14 April this year—two weeks before the election—in which he provided answers to 50 questions? One answer states:
Our expenditure plans require no additional taxation.
In light of that, how does the Prime Minister justify a 10 per cent. increase in council tax? Surely that is yet another Labour broken promise.

The Prime Minister: That is absolute nonsense. We gave pledges on the standard and top rate of income tax, and we have kept to those pledges. We never promised—no Government could—that we would never raise council tax bills in any shape or form. The actual rise that has occurred is the increase pencilled in in the Conservative Government's spending plans.

Mr. MacShane: Question 3, Madam Speaker—[Interruption.] This is my first question under the new regime. Forgive me, Madam Speaker.
Does my right hon. Friend agree that, in view of the fact that RJB Mining made profits of £173 million in 1995 and £189 million last year, questions about the future of the coal mines that Mr. Budge owns should be addressed, first and foremost, to Mr. Budge? Given the huge importance of the industry, especially in Yorkshire, I ask


my right hon. Friend to give some words of assurance to those who believe in the future of that industry—particularly those brave and skilled men who work in it.

The Prime Minister: We will do everything that we can to assist the coal industry. My hon. Friend is absolutely right to point out the very substantial profits of RJB Mining in the past two years. It is also the case, of course, that other British deep-mining companies have signed contracts with generators at more competitive prices. However, having said that, we are working as intensively as we can to try to ensure that the generators and RJB come together. We want to preserve as much of the deep-mined coal industry as we possibly can. This comes at a time when the National Grid and others are advising us of the dangers of relying too much on gas-fired power stations.
In the light of that new advice, my hon. Friend the Minister for Science, Energy and Industry will announce today a review of our policy on the approval of new power station developments. He proposes that, in the meantime, all existing applications should be put on hold. That is consistent with the long-term energy needs of the country. It is not a panacea by all means, and it certainly is not a Government subsidy, but it is important that we do all that we can in the long-term interests of energy policy in this country.

Mr. Hague: When the Paymaster General said yesterday that the well-heeled have already done very well out of tax shelters, was he referring to people who have saved more than £50,000 in their working lives, or was he simply speaking for himself?

The Prime Minister: The announcement that was made yesterday is good news for middle Britain. There will be 6 million extra savers as a result—6 Million people will be able to save but at present cannot. Nothing better demonstrates the difference between the two political parties than the right hon. Gentleman's party saying that the system should not be changed at all and our party saying that another 6 million people should benefit.

Mr. Hague: We are all in favour of encouraging saving. We are not saying that the system should not be changed, but do not these proposals penalise hundreds of thousands of people who have worked hard and saved hard in good faith? Was it not a bit rich for a Minister who has £12 million in tax-free offshore trusts to introduce a new tax for people who have worked all their lives, only to build up much smaller amounts? In order to improve these proposals, will the Prime Minister reconsider? Will he order the Treasury to reconsider the £50,000 limit that the Government advocate?

The Prime Minister: I should explain that the same amount of tax relief is going in under our proposals. Indeed, over time there will be more. As a result of people being able to put in cash and take it out as they want—as opposed to its being tied up at the moment for five years—many more people can benefit. Supermarkets, banks and others will offer new proposals. The right hon. Gentleman says that the limit is £50,000. I should point out, of course, that for a couple it is £50,000 each—in

other words, £100,000. Therefore, I believe that ensuring that the tax relief that we give is directed to middle and lower-income families is the best way of using it.

Mr. Hague: If the Prime Minister is not prepared to reconsider these proposals for the hundreds of thousands of people who will be adversely affected, what will he say to the people who were told by that the Labour party would not do this? The Chief Secretary said to the Investors' Chronicle last year that the idea that
Labour is examining proposals to abolish personal equity plans and tax-exempt special savings accounts
was "not true". He went on to say that people were entitled to certainty. What sort of promise is that? What consideration can the Prime Minister give to proposals that involve breaking a promise on which his party was elected to power?

The Prime Minister: That is absolute nonsense. No promise was broken. The same amount of money in tax relief is going in, but, for the first time, the 4.5 million people who have TESSAs, which have a £9,000 limit and which have to be in for five years, can now increase the amount up to £50,000. They can put in £1,000 in cash each year as they wish, and they can get it out as they wish, and the amount of tax relief is set to rise over the coming years. For the first time, middle and lower-income families have a tax-free account into which they can put money. The money can grow. This is about extending opportunities to save, not curtailing them.

Mr. Hague: If the Prime Minister does not think that the Chief Secretary broke promises from what he said to the Investors' Chronicle, he should see what the Chief Secretary said to The Observer. The Chief Secretary said:
We've always supported the Pep regime … We're not reviewing it at all.
The newspaper commented:
It is easy to imagine Labour putting a cap of … £50,000 per person on these holdings. But Darling says he is 'not actively looking at' the question of a cap.
Does the Prime Minister recognise that the proposal is a clear breach of an election promise? Have not middle-income earners now seen mortgage tax relief slashed, pensions clobbered, council tax raised and TESSAs and PEPs scrapped? Will he reconsider the £50,000 limit, because people invested in good faith?

The Prime Minister: The right hon. Gentleman has just suggested that the £50,000 limit is retrospective. That is not the case. Those who have money in funds are protected right up to April 1999, when the new system will be introduced. There will actually be more money for them.
We know that interest rates have had to go up since the election, on the advice of the Bank of England: they would have gone up before the election had the previous Government acted responsibly. As for council tax bills, we inherited those figures from the previous Government, and I doubt whether the right hon. Gentleman stood up in Cabinet and said that they were wrong.
The plain fact of the matter is that this proposal will give 6 million more people the chance to save. There is a simple choice. We can either give those 6 million people the first chance that they have had in their lives to save in a tax-free account or carry on paying a large sum of money to a small group of people at the top. I believe that we should opt for the many, not for the few.

Mr. Hague: If the Prime Minister does not recall what the Chief Secretary said, does he recall that, during the election campaign, he himself said that the idea that he would take action against PEPs was "completely absurd"? Does he recall saying that he had no plans to increase tax at all? When he put up posters saying that, he did not put a footnote saying, "Except for people who have saved hard over recent years" or "Except for people with pension funds" or "Except for people reliant on disability benefits." He said that he had no plans to increase tax at all. Will he now review the £50,000 proposal? It is, after all, in a consultation paper; so if it is not open to review, what is the point of the consultation?

The Prime Minister: First of all, let me say that no one will take lessons on broken promises from the party that said that it would never put VAT on fuel, and put it on, and introduced 22 tax rises.
Government is about the choices that we make. There is a choice: we can either spend the same amount of money on tax relief and give 6 million more people the chance to save, or carry on with the existing system. I believe that it is better to give people the chance to save for the first time in their lives by opening up savings to the millions of people who have never had that chance. Millions of people in this country who listen to this debate will realise yet again that the Conservatives represent a few people at the top, whereas the Labour party stands for the many.

Charlotte Atkins: Does my right hon. Friend agree that a sensibly set national minimum wage will encourage employers to invest in the skills of their staff, and hence help this country to compete? What time span does the Prime Minister envisage for the introduction of the national minimum wage, which is so important to my constituents in Staffordshire, Moorlands?

The Prime Minister: Obviously we want the minimum wage to be established as soon as possible. Of course my hon. Friend is absolutely right: properly implemented, a minimum wage is a good part of a modern labour market strategy, which is why many countries that have minimum wages, such as the United States and the Netherlands, have lower unemployment than Britain.
Of course, one of the benefits of a minimum wage is that it will get us some way towards reducing the huge benefit bill that goes to subsidise low pay. Despite what the neanderthals on the Opposition Benches say, a minimum wage is not just fair, but the right thing for employment.

Mr. Green: The Prime Minister will recall the Chancellor of the Exchequer saying at the Labour conference last year that
A Labour Chancellor will not permit"—

Hon. Members: Reading.

Mr. Green: I am reading the Chancellor's quotation. He said:
A Labour Chancellor will not permit tax relief to millionaires in offshore tax havens.
May I ask the Prime Minister: has the Chancellor reversed that policy? If not, may I suggest that the Prime Minister introduce him to the Paymaster General, who, at the same time as denying small savers in TESSAs and PEPs the fruits of their saving, is enjoying the fruits of exactly the kind of offshore tax avoidance that the Chancellor condemned in opposition?

The Prime Minister: No, Madam Speaker.

Mr. Skinner: Now that my right hon. Friend has turned over the pages of the energy policy—which some of us have been arguing about for a long time—by restricting the amount of gas that is used in power stations, may I sort of jolly him along a little further and suggest that it would be a good idea as well to restrict the electricity from France, which is also getting rid of miners' jobs, and to stop the protection for nuclear power? Will he also bear it in mind that it comes a bit thick for that millionaire Budge to talk about sacking miners, when he is getting opencast licences by the score and every million tonnes that are ripped out of the soil result in 500 miners losing their jobs in a coal mine? Something has to be done about that as well.

The Prime Minister: On my hon. Friend's point about imports of fuel, of course we are taking action on that. Indeed, a Bill that is going through the House will improve the situation. It is also the case that, as a result of the announcement that my hon. Friend the Minister for Science, Energy and Industry will make, some relief will be given to the industry by the moratorium on gas-fired power stations.
On opencast mining, proper consideration needs to be taken—which my hon. Friend knows that we will ensure—of the environmental factors, although many people work in the opencast industries as well, but what is important is that we set any decisions that we take within a long-term energy policy, because it is too important to be left simply to short-term market forces, which was the policy of the Conservative party.

Mr. Shepherd: Why, when the Cardiff electorate rejected the Welsh Office's proposals for an elected assembly, and when 75 per cent. of the Welsh electorate withheld consent to the proposals, are the Government proceeding with them? Is that not a denial of representative democracy? Why bother to have a referendum?

The Prime Minister: The case was for a simple majority in a referendum and that was achieved. On that basis, it would be perverse if we were then to say, having secured a majority in the referendum, that we were not proceeding with the elected Assembly. May I put the question the other way around? Supposing there had been a minority in favour and we had then said that we were proceeding with it, there would have been an outcry from the Conservative Benches.

Miss Begg: As someone who does not understand the allure of football, I can appreciate that it is a great passion for many boys and girls and some hon. Members. May I therefore welcome today's announcement by my right hon. Friend the Secretary of State for Education and Employment that he is to set up homework clubs in football grounds, thereby improving the literacy of many young people and giving them a great chance in the future? Are there any plans to extend the scheme to Scotland, even if the Prime Minister cannot guarantee the success of Aberdeen football club?

The Prime Minister: I am afraid that I can give no guarantee on the latter point. The circumstances in Scotland are obviously different because there are fewer big football clubs, but—[Interruption.] That is a statement of fact. However, my hon. Friend the Minister for Education and Industry, Scottish Office, is working on a scheme that will apply the same principles in those clubs. We are trying to get them together in a Scottish programme as well. The programme launched today will be an enormous success. It is exactly the right thing to do, to try to involve children in homework centres that will excite them as well as teach them and give them the chance to build relationships for the long term with those clubs, which will be helpful to both parties involved.

Mr. Hogg: Does the right hon. Gentleman understand the anger and distaste of existing—[Interruption.]

Madam Speaker: Order. Let us have some order in the House.

Mr. Hogg: Does the right hon. Gentleman understand the anger and distaste of existing PEP holders who have seen their savings capped at £50,000, the statement having been made by a Minister, namely the Paymaster General, who has so ordered his own affairs as to put his millions outside the scope of UK taxation? Is that not a disgraceful double standard?

The Prime Minister: In relation to my hon. Friend, the right hon. and learned Gentleman is wrong as a matter of fact. In relation to the point about £50,000 PEP holders, which of course for a couple would be £100,000, there is, as I said to the Leader of the Opposition, a choice: we can spend the same amount of tax relief as it is spent at the moment, or we can do it in a fairer way that gives millions of people who do not get the chance to save now the opportunity to do so. We have made our choice; as usual, the Opposition want to have their cake and eat it.

Mr. McDonnell: As well as ignoring the hypocritical cant from the Opposition, will my right hon. Friend intervene at this late stage in the discussions on lone-parent benefits, and in the spirit of his concept of the giving age, to refer the issue to the newly formed social exclusion unit to address the genuine and deep-seated concerns of many Labour Members, in order to avoid the tragedy of the new Government being the first Labour Government to cut benefit for the poorest children in our community?

The Prime Minister: I simply say that we have to make a choice of priority. The money that we have put into child care and specific help for lone parents—the £200 million programme announced by my right hon. Friend the Chancellor—is, we believe, the best way to help lone parents. Many of them want the chance to get off welfare and into work. The Government are putting several hundred million pounds into the system to help them do that. We inherited a difficult situation, but we believe that we have made the right choice of priority, however difficult it is.

Mr. Loughton: Last week, the Prime Minister invited himself and the world's press to tea with a pensioner couple to proclaim the benefit of the £20 pre-Christmas bonus. In the light of yesterday's local government spending allocation, will he tell us whether he has been invited back for tea to explain how last week's £20 gift has been more than gobbled up by the average council tax rise of £70?

The Prime Minister: First, what the hon. Gentleman says is incorrect. Secondly, the increase in council tax was the increase envisaged by the previous Government. The Conservative Government were not giving any additional help to pensioners for fuel bills, so I bet that, if I went back to the same pensioner couple, they would say, "Thank goodness we voted Labour, not Tory."

Iraq

Mr. Dalyell: If he will hold discussions with Arab Governments, and those of the other permanent members of the Security Council, with a view to persuading the United Nations to lift sanctions on Iraq in advance of a general settlement.

The Prime Minister: No is the answer to that question. Lifting sanctions cannot begin until Iraq has fully complied with the relevant United Nations Security Council resolutions.

Mr. Dalyell: How can any of us justify an Anglo-American policy, because that is what it is, that results, intentionally or not, in 960,000 Iraqi malnourished children—a UNICEF figure—7,000 of whom died in October 1997? Will my right hon. Friend reflect on a view that is rather different from his own: sanctions, far from weakening the regime of Saddam Hussein, strengthen an enclosed dictatorship of that nature?

The Prime Minister: I can assure my hon. Friend that I reflect very much on those matters. No one can look at what is happening in Iraq without feeling the huge weight of tragedy for those young children and for the people of Iraq who suffer. But they suffer because of Saddam Hussein; they do not suffer because of the United Nations, our American allies or ourselves.
It is so important that people understand that the Security Council resolution is in place and UN inspectors have been sent in because we cannot allow even an outside risk or possibility of Saddam Hussein developing chemical or biological weapons of warfare. Over the past few years, those inspectors have found—and have therefore been able to eliminate and destroy—large parts of what could have gone to build such weapons.


The possibility is therefore not theoretical but actual. We have to maintain that pressure—we have to do it—until those UN resolutions are complied with. If they are complied with, immediate help can be given to the Iraqi people.
It is up to Saddam Hussein to make the changes. I agree that it is a terrible tragedy, and it is a great responsibility for anyone to perpetuate sanctions in such circumstances. I honestly believe, however, that the alternative would be far worse.

Regional Development Agencies (England)

The Secretary of State for the Environment, Transport and the Regions (Mr. John Prescott): With permission, Madam Speaker, I should like to make a statement on the English regions.
On 1 May, the British people gave the Government an overwhelming mandate to modernise Britain—to decentralise decision making, to promote a modern and efficient economy, to raise standards in education and training, and to fight against deprivation and the causes of economic and social decline.
We are committed to promoting policies that pursue jobs, growth, competitiveness and social progress, within a sustainable environment. Our aim is to achieve sustainable growth and to bridge the economic and democratic deficit that bedevils all the English regions. The decision to create the Department of the Environment, Transport and the Regions underlined the Government's more integrated approach to policy making, which will be just as important at the regional level.
The White Paper "Building Partnerships for Prosperity", which I have published today, states the Government's proposals for new structures and new opportunities in the regions. The new regional development agencies will bring fresh vitality to the task of economic and social regeneration in the regions.
For far too long, the English regions have been disadvantaged by the denial of development agencies, which helps to explain why English regions have lagged behind other regions in Europe. For far too long, the English regions have been neglected; it is our intention to change that.
Since 1945, successive Governments have introduced many programmes aimed at achieving economic and social objectives, but those have often lacked coherence, particularly at the English regional level. Now, more than ever, the English regions are demanding a strategic lead—for greater focus on wealth creation and jobs, for effective policy integration, and for co-ordination of central and local effort. Those goals have been achieved, to great effect, in the development agencies in Scotland, Wales and Northern Ireland.
Our election manifesto undertook to establish regional development agencies. In June, we launched a major consultation process. My hon. Friend the Minister for the Regions, Regeneration and Planning visited all the English regions and opened a dialogue with regional and national bodies. We received more than 1,500 responses to our consultation paper, which revealed overwhelming support for our proposals.
I will therefore shortly be introducing a Bill to establish nine new regional development agencies, based on the areas of the present Government offices for the regions. These "agencies for change" will be modelled on those in Scotland, Wales and Northern Ireland. One of their key functions will be to develop and implement regional economic strategies. They will do that in partnership with regional interests such as local authorities, training and enterprise councils, industry, business and voluntary groups, as well as with the Government.
Regional development agencies will be business-led, but board members will include representatives not only of industry but of local authorities, further and higher education, the voluntary sector, rural interests and tourism. The agencies will bring greater coherence and a regional perspective to national Government programmes and national policy making in areas such as transport and land use planning.
My intention is that regional development agencies will adopt the best elements of the Scottish, Welsh and Northern Ireland development agencies, which have played a key role in improving the economic prospects of their countries, but we will not impose a single blueprint on the regional development agencies. The English regions have different and distinct characteristics. Our Bill will provide a broad framework of powers for RDAs, to give them flexibility to reflect the particular needs of the regions that they represent.
Regional development agencies will bring together a wide range of functions that are presently carried out by many separate agencies. Those activities fall into three broad areas. First, RDAs will produce and implement economic strategies that reflect regional priorities and needs, in consultation with their partners.
The strategies will cover economic development, social and physical regeneration, competitiveness and innovation. They will also contribute to work on transport and land use planning. That will all be done in a context that protects the environment and promotes sustainable development.
The strategic plans will specifically cover business support and training. Business links and training and enterprise councils will continue to provide services locally, with RDAs monitoring and providing a strategic regional focus for their work.
Secondly, RDAs will take the lead on inward investment in their regions, working with partners to market the region as a business location. They will develop integrated packages for investors and advise Ministers on applications for regional selective assistance.
Thirdly, RDAs will be responsible for specific regeneration programmes. They will lead on the European structural funds and manage the single regeneration budget challenge fund. They will also take full responsibility for the regional regeneration programmes of English Partnerships and the Rural Development Commission.
As a Government, we are strongly committed to the countryside, recognising the particular needs of people who live and work in rural areas—many of them now represented by Labour Members. Our proposals will put urban and rural regeneration on the same footing. That will ensure that rural interests will be given their full weight. Indeed, they will be strengthened by our proposals.
We are also committed to ensuring an effective focus at national level for expertise, advice and information on rural matters. We are therefore accelerating the part of the Government's comprehensive spending review that is examining how to strengthen the institutional arrangements for delivering rural policy. We will involve the relevant agencies in that work.
The Greater London Authority (Referendum) Bill, which is before Parliament, is the first step in providing a new strategic framework for London, which will also have


its own development agency. The arrangements for that agency will be set out in the White Paper on London government which is to be published next year. It will make clear its democratic accountability to the Greater London assembly and the mayor.
Regional development agencies will, of course, be accountable to Ministers and to Parliament, but they will also need to be accountable to their regions. Organisations representing local interests, and, above all, elected local authorities, have a right to influence the work of RDAs. That will be recognised in our board appointments.
We intend to take further steps. As we made clear in our manifesto, we are committed to moving, with the consent of local people, to directly elected regional government in England. That complements devolution in Scotland and Wales and the creation of a Greater London assembly. Demand for directly elected regional government varies across England, and it would be wrong to envisage a uniform approach at this stage. Local authorities and their regional partners are already creating voluntary chambers. We welcome that development and intend to build on it as a mechanism through which regional development agencies will have greater regional accountability.
Only two of the nine English regions match the European average for GDP per head. That is unacceptable. The Government are committed to reversing that decline in Britain's economic performance. Our proposals will do that, with the regions to the fore.
Modernisation of the structures in the English regions is part of the wider reform of the governance of the United Kingdom, spearheaded by the devolution of powers to Scotland and Wales. Our aim is for the English regions to grow and prosper within the United Kingdom and within the European Union. Our proposals for regional development agencies are fundamental to achieving that. They will ensure that the potential of each English region can be unlocked.
That is our vision, shared with the hundreds of individuals, groups and local partners who have responded to our consultation with overwhelming support and enthusiasm. Together, we can ensure that the regions will fulfil their aspirations.
I have been associated with the cause of regional development and decentralisation for more than 20 years. I was appointed as Opposition spokesman on regional affairs back in the early 1980s and produced our alternative regional strategy. As deputy leader of the Labour party, I established the regional policy commission under Bruce Milian, the former European Commissioner and Labour Secretary of State for Scotland. The Millan commission prepared the ground for the White Paper in a detailed and excellent way. I pay tribute to it for that work.
This is a cause very dear to my heart, with widespread support in the country and, I am sure, in the House. It is therefore with great pride and pleasure that I commend the White Paper to the House.

Sir Norman Fowler: The fundamental issue is not the goal of regional development, which we all want, but how it is to be achieved. We have serious doubts and concerns about the new development agencies that the Secretary of State is proposing. Will he

confirm that the agencies will be not elected, but appointed entirely by Ministers? They are the creatures of Whitehall and will be unaccountable to the public. Will he also confirm that there is no prospect of those appointed agencies being changed during this Parliament, which is the only period for which the Government can pledge
How will the agencies attract more inward investment to England? Has not inward investment been running at record levels for the past 10 years and more? Is there not a danger that the Secretary of State's plan will set one region against another, with no overall benefit to Britain?
Is the Secretary of State aware that the chairman of the Rural Development Commission has just resigned in protest—[Horn. MEMBERS: "Good, about time."] Labour Members say, "Good." That shows their concern for country areas. He has resigned in protest at the Government's decision to transfer the commission's rural regeneration work to the proposed RDAs. The chairman has said:
The break-up of the Rural Development Commission sends a negative message to rural England and is a devastating blow for the commission.
Does the Secretary of State agree with that?
We know that Whitehall has been noticeably reluctant to give up its powers, so both regional selective assistance and training will stay with Government Departments. Can the right hon. Gentleman explain the position on planning? The consultation paper, such as it was, suggested that agencies would have the powers to acquire land and prepare it for industrial development. Does not that open up the prospect of more industrial development in green belt land, which many people fear is already under threat?
The Secretary of State talks about the next step being regional assemblies. Is he aware that at the weekend his Minister of State gave an on-the-record interview to The Scotsman? The paper reported that the Minister signalled that, if Labour were to win the next election, it could pursue a federal structure for England. He left open the prospect of regional assemblies having law-making and tax- raising powers. What is the Government's constitutional agenda? Does it involve step-by-step progress to a federal structure?
As a west midlands Member, I want to see regional development and, as a party, we want to see regional development, but the Government's proposals amount to only more bureaucracy, less accountability, and duplication of effort, without any benefit for the regions.

Mr. Prescott: I took the opportunity to read the report of the debate on 20 June 1975 when the proposals for the Scottish Development Agency were brought before the House. Everything that the right hon. Gentleman has just said was said in that debate by the Opposition.
Indeed, the right hon. Gentleman voted against the SDA, so I assume that his arguments about bureaucracy mean that he will vote against the new regional development agencies. I remind him that in the election after Labour implemented the agencies, in 1979, his Government swore to abolish the Scottish Development Agency but changed their mind. They changed their mind because the development agencies in Scotland and Wales had done a good job and had attracted inward investment to improve their economies. That is


precisely what I want to see for the English regions. It is because those agencies have been so successful that we have attempted to model, as best we can, the English development agencies' powers and resources on the Scottish Development Agency and the Welsh Development Agency.
We believe that the new agencies will be an important force in developing the English regions and their economies. The proposals are important for regional economic development and will play their part in attracting inward investment. It is noticeable that the Scottish economy and the Welsh economy have been much more effective at attracting inward investment, in total, than the English regions. That is largely because Scotland and Wales have had active regional development agencies representing their interests in this country and abroad, as every hon. Member has learnt when travelling abroad. That is why we propose to set up development agencies in England.
I hear what the right hon. Gentleman said about the resignation of Lord Shuttleworth. I have just received his resignation note. He was to retire in March. He was appointed as a Tory by a Tory Government, and he knew that I had no intention of reappointing him as the chairman of that development agency. He is a bit demob happy and he has gone. So be it. The proposals have nothing to do with Lord Shuttleworth: they are about the development of the rural economy. I shall take no lectures from Tories on that subject. A Labour Government set up the rural development bodies and my proposals today mean that a Labour Government will introduce better arrangements for the rural economies.
Yes, Lord Shuttleworth opposes the Government's policy. That is hardly a surprise, but the judgment to be made is whether our proposals will be better for the rural communities than what he would prefer. I call in aid those who are supporting our proposals for the rural areas, including the National Farmers Union, the Council for the Protection of Rural England, the local authorities in those areas and the environmental groups. We have to judge the interests of those groups against what Lord Shuttleworth has said. Still, he has gone; happy retirement to him. Frankly, I think that the rural areas will be better off without him. [HON. MEMBERS: "Disgraceful."] All planning matters will go through the normal planning procedures. [Interruption.] I do not think that it is disgraceful. If Lord Shuttleworth levels charges against us that we do not accept, we are entitled to handle them in the most robust manner. We intend to ensure that rural areas are put on an equal footing with urban areas, to give them the importance that they deserve. We will be judged on that when we have implemented our policies. That is a proper response to such a report.

Mr. Andrew F. Bennett: I very much welcome my right hon. Friend's proposals, but I hope that he will press on with the second stage, which is to have elected assemblies in the English regions. In the meantime, will he examine the ways in which the regional bodies will be accountable to the House and consider setting up regional Select Committees to scrutinise them effectively?

Mr. Prescott: The direct answer is that it is a matter for the House whether we establish such Committees, but,

of course, the bodies will be accountable to Ministers, to Parliament and to the National Audit Office, because they will be statutory bodies set up by the House itself. Make no mistake about it: we have agreed to introduce the development agencies to deal with the economic applications, but we will indeed want to subject them to democratic accountability.
I have always believed in regional government, and I hope to see it brought about. The timetable in the first five years is not easy, but it is possible to work with voluntary groups to establish some form of democratic accountability, and we will discuss with various bodies how we can achieve that.

Mr. Nick Harvey: I welcome the creation of regional development agencies and the extensive process of consultation that took place beforehand, but does the Secretary of State recognise the disappointment and frustration in the English regions at the fact that no new funds will be available to enable those bodies to compete on a level basis with the development agencies in Wales, Scotland and Northern Ireland, in both attracting inward investment and levering funds out of Europe? If we are simply to have new bodies to churn existing funds, is not that falling into the same trap into which the previous Government fell?
Will the Secretary of State explain the anomaly of the new regional development agencies monitoring the work of the training and enterprise councils and advising Ministers on regional selective assistance, yet taking on the functions of the Rural Development Commission, which is the one body that could and should separately have made the case for the rural areas? Is it because Lord Shuttleworth was a softer target than the Secretaries of State for Trade and Industry and for Education and Employment?
I welcome this first step towards regional government, but can the Secretary of State assure us that, as we move on to further steps, the boundaries will be considered? The boundaries on which the agencies are to be set up are matters of statistical convenience and in many parts of the country bear no relation to real communities.

Mr. Prescott: The boundaries will be determined when we consider the democratic accountability of the agencies and will be the legitimate concern of whatever structures are then in place. The proposed boundaries are those of the Government offices, set up by the previous Administration, and we have been happy to accept them. It is easier and quicker to work on those boundaries in setting up the agencies.
On resources, the Scottish Development Agency was set up with funds of £150 million. The present programme, drawing the various strands together, as set out in the White Paper, gives us £750 million, and more than £1 billion of investment in public-private partnerships. We believe that that is a good start, and that the agencies can play a major role in bringing more and more resources to the regions, exactly as the Scottish and Welsh development agencies did. I am satisfied that we can make a start in that way.
TECs are an important consideration in regional development and in boundary issues, as some TECs fit local rather than regional boundaries, and no regional strategy has been developed in the areas of education and


skills training. We are currently discussing with the relevant Departments the way in which we might be able to co-ordinate that. We need to give those aspects a regional dimension, which is as important to planning and transport as it is to education and skills training.

Mrs. Louise Ellman: Does the Deputy Prime Minister agree that his historic announcement this afternoon is a major breakthrough for all those who are concerned about employment, training and regeneration in the English regions? Is he aware that in the north-west region his proposals will be met with great support and great acclaim? Can he explain the attitude of Conservative Members, given that those in private sector, including the business leadership team, the CBI and chambers of trade and commerce, are among the strongest supporters of regional development agencies as a means of boosting business and employment?

Mr. Prescott: The points made by my hon. Friend are absolutely right. In the White Paper we quoted various organisations that normally ally with the Tory party, but which find themselves yet again at odds with it on a fundamental issue of policy. I note that the Opposition spokesman did not say that they would abolish those agencies if we set them up. It is for them to make that decision in the future—now they are the Opposition and we are the Government, and there is a heck of a difference.
My hon. Friend the Minister for the Regions, Regeneration and Planning toured the country and spoke to people in all the regions and to representatives of national business and trade bodies. They all supported the idea of the establishment of regional development agencies. We found that support to be as strong in the south-west as it was in the north-west, and in all the English regions. We are delighted to present a policy which has been universally accepted by those regions.

Mr. John MacGregor: Given that Scotland will now have its own Parliament and Wales will have its own Assembly, does the right hon. Gentleman recognise that one of the greatest concerns for the English regions, and cause of great unfairness to them, is the Barnett formula? Its application means that there is much higher public expenditure per head in Scotland and Wales than is now justified by the facts. Lord Barnett believes that that formula should be reformed. What does the right hon. Gentleman intend to do about that?
On inward investment, what will the right hon. Gentleman do about the fact that the Scottish and Welsh development agencies can outbid the English regions because of their access to much greater amounts of public expenditure than those available to England?

Mr. Prescott: The Barnett formula was devised for the fair distribution of resources between England, Scotland, Wales and Northern Ireland. I accept that there have been complaints about it, but we have made it clear in the White Paper, particularly in relation to devolution in Scotland, that we have no intention of changing it. It could be subject to a review at any stage by the newly elected Parliament for Scotland, the Welsh Assembly, and English regions to discuss any perceived unfairness. At this stage, however, we have made it clear that we have no intention of conducting such a review.
On inward investment, I am sure that all Members would agree that the current situation is not a happy one because the Government have wasted a lot of money when parts of the country have been played off against each other. [Interruption.] We have been left with that totally unsatisfactory situation. The President of the Board of Trade is considering how it could be improved. We are working out a concordat to ensure that the use of British taxpayers' money is seen to be fair by all parties and that Britain is not played off against other countries, nor the different regions of the United Kingdom played off against each other, by inward investors. That practice is unacceptable and expensive, and we intend to change it.

Mr. John Gunnell: I congratulate my right hon. Friend on his statement. I heard him talk about regional development in 1977, and many times since. I congratulate him and the Minister for the regions on their work over the years on behalf of regional government and regional development agencies.
Will my right hon. Friend assure me that, despite the difference in structure, there will be a level playing field between the regions, including Scotland, Wales and Northern Ireland, on inward investment? I represent and have worked on behalf of people in Yorkshire and Humberside, and they are concerned that we may still not have the necessary structure to create the level playing field that they desire to attract inward investment.

Mr. Prescott: I am grateful to my hon. Friend for his kind remarks. To have a level playing field is our intention—we need to bring that about. I believe that the regional development agencies will mean that the English regions will be able to play a much more effective part in attracting inward investment than they could play without them.

Mr. David Curry: I hope that Lord Shuttleworth will be around to celebrate the right hon. Gentleman's resignation in the same terms as he has just celebrated Lord Shuttleworth's resignation.
Does the right hon. Gentleman accept that there will be a real problem of competitive subsidy between regional development agencies? What will he do to make sure that that does not happen, bearing in mind the relative costs of getting LG and Siemens to the United Kingdom? Does he agree that what England lacks is a unified agency to attract investment, rather than scattered agencies? Does he understand that we in North Yorkshire will be suspicious that our interests will not be looked after by the municipal tyros of Doncaster, Bradford and Hull?

Mr. Prescott: That was quite an intelligent contribution until the last remark. There is a real issue in respect of competition for subsidies—there is no doubt that it is a real problem. The Government of which the right hon. Gentleman was a member were unable to do anything about it and, as he rightly acknowledges, they did not do anything about it. We believe that we have to do something. With the number of English agencies that will be set up, we rightly say that we want a level playing field and fair treatment. We have to have greater transparency about the amount of resources available to all those regions for attracting inward investment. It is our intention to achieve that.
As for the right hon. Gentleman's remarks about local authorities, they have an important part to play in the development of democratic accountability. I know that he is a strong supporter of local government in that sense, and I envisage local authorities playing that important role. However, we have made it clear that we need to be business-led in certain matters, and such considerations will play a major part in the regional development agencies.

Mr. Ken Purchase: May I give the warmest possible welcome to the plans of the Secretary of State and his team for regional development agencies? They will help to reinvigorate and re-identify the personalities of our regions across the nation on an equal footing, one with another, with proper consideration for economic welfare within each region. We in the west midlands—an area which has experienced great devastation as a result of over-centralised policy making here in Westminster—will be given the opportunity to reinvigorate ourselves with the help of sensible planning and a proper framework of regional assemblies and regional development agencies.
May I give a special welcome to the part of the White Paper that deals with co-operative development throughout the British Isles? May I recommend to my right hon. Friend that he gives as great a push as possible to the redevelopment of worker co-operatives, credit unions, housing co-operatives and so on, which will give ordinary people a better grip and understanding of the business process that will create wealth in this country within the framework of the regional agencies?

Madam Speaker: Order. That was a very nice accolade for the Secretary of State, but there was no question in it—it was just a long comment. If this goes on, I shall have to stop the statement, because we must have questions, not long statements of congratultion.

Mr. Purchase: There was a question about cooperatives.

Madam Speaker: There was no question. I listened carefully for a question and the hon. Gentleman will find that there was not one. I am sure that the Secretary of State will want to comment on the hon. Gentleman's statement and it is his duty to do so, but it is Back Benchers' duty to ask questions.

Mr. Prescott: I take your point on board, Madam Speaker. The matter of co-operatives is an important one. If we look for differences to explain why European regions have done far better than the English regions, we see that their advantage lies not only in their development agencies, but in their development of a far more comprehensive co-operative system, especially in France.

Mr. David Trimble: One welcomes in principle any proposals that will move power out of Whitehall and into the regions, although these proposals have not yet done so. The really important issue is dealing with competition between regions—between the new agencies and existing agencies in Scotland, Wales and

Northern Ireland. That matter has not been addressed by the White Paper and I would suggest to the Secretary of State that is foolish to proceed without clearly dealing with the central problem. It is all very well to talk about level playing fields, but there has to be some mechanism for dealing with dispute and competition, and that has to be based on a genuinely national strategy—a United Kingdom-wide strategy—that, in turn, has to reflect different needs.
People talk about the Barnett formulas, but it must be recognised that those are based on needs. Please will the Secretary of State make it clear what sort of arrangement is proposed to deal with the competitive needs of all the regions of the United Kingdom and not only the English regions?

Mr. Prescott: I have made it clear to the House that we recognise the problem of competition between the different areas, but, in establishing the English regions, we are not declaring for a federal United Kingdom. The English regions constitute England, and there is Northern Ireland, Wales and Scotland. There will be a certain amount of competition between the bodies and we want a level playing field. However, in the early stages of the development—perhaps towards regional government, if that is the evolutionary change towards which we are moving—each body will be represented in the Cabinet by the Secretaries of State for Scotland, Wales and Northern Ireland, and I am happy to represent the English regions.

Mr. Barry Sheerman: I congratulate my right hon. Friend. I remember his passion for regional government when I worked for him many years ago and I know that the report is based on good homework. But can the emphasis in the regional development agencies be on growth from within, not just the panacea of attracting industry from without? If we have the right focus, we can develop our regions, with all their talents and skills, from within. Yorkshire and Humberside, the region which I and my right hon. Friend share, is in the front.
Can we seriously reconsider having regional Select Committees, because that would add to the power of the House and the regional development agencies? Can we also consider the prime role which could be played by regional investment banks, which would not cost a lot of money?

Mr. Prescott: I shall pass on my hon. Friend's comments about the regional Select Committees to the appropriate authorities, but that is a matter for the House.
I have always strongly believed in the development of the indigenous economies. In the alternative regional strategy document produced in the 1980s, I was highly critical of regional policy, which was largely about attracting inward investment instead of developing the potential of the local and regional economies. The regional development agencies will do precisely that. They will look at the differences within the regions and exploit their assets and potential by bringing together the various partners. I hope and believe that one of the essential roles of the development agencies will be to consider how to develop the local and regional economies and investment within those areas.

Mrs. Ann Winterton: Will the right hon. Gentleman accept that the success of the Scottish,


Welsh and Northern Ireland development agencies was due mainly to the fact that the UK taxpayer subsidised them, to great effect?
The new agencies will not receive the blessing from the Treasury that the others did. Does the right hon. Gentleman accept that, as a result, instead of creating a level playing field he will be doing exactly the opposite and the regions will compete one against the other? Furthermore, is the right hon. Gentleman aware that in my constituency informal and voluntary partnerships are working together successfully, and the interests of Congleton in Cheshire are not the interests of Lancashire?

Mr. Prescott: There is no doubt that there are sub-regional parts of an economy that cannot be centralised in a region and one cannot assume that there is one pattern for all the regions. Anyone who knows our English regions, with their industrial and rural make-up, knows that they vary from one end to the other. Therefore, we must be flexible and adjust to that. That is why we want a regional body rather than a Whitehall organisation.
The subsidies given to Scotland and Wales reflected the high levels of unemployment when the agencies were established. The agencies were one way of responding to that. But after 18 years of a Tory Government, all regions of the United Kingdom have mass unemployment. [Interruption.] They had the record of creating more than 1 million unemployed in the south. Some of my northern colleagues found it hard to believe that there was mass unemployment in the south. But that is why we needed a national solution rather than a regional one. Therefore, the subsidies reflected the higher levels of unemployment in those areas. Now we must consider how to develop all the English regions and ensure that we provide subsidies and support where necessary on a level playing field, and we intend to do that.

Mr. Roger Stott: My right hon. Friend has been involved with this issue for a substantial number of years and I congratulate him on his statement. I make one small plea. If he has any influence regarding the location of the headquarters of the regional development agencies, I remind him that we have a wonderful place called Wigan, which he and the Minister for the regions have visited several times, and I would offer him an office at the end of the pier if he would consider it.

Mr. Prescott: I remember that I enjoyed the visit to Wigan pier and to the school that is on it, but I cannot give my hon. Friend any assurances about the location of the regional headquarters. Indeed, it would be wrong for a central Government official or a Minister to take what is essentially a decision to be taken in the regions.

Mr. Tony Baldry: The Deputy Prime Minister said that part of the reason for making these changes was to decentralise decision making, but in so far as those bodies will take any decisions, they will be undemocratic decisions because those bodies are unelected, unaccountable quangos.
Does the Deputy Prime Minister accept that the proposals lack coherence and will fracture the United Kingdom, in that a town such as Banbury will be lumped in with counties such as Kent and Sussex, notwithstanding the fact that the west midlands is only a few miles up the

road to the north and the east midlands a few miles to the east? That will mean that, on every map throughout the country, towns such as Banbury will be marginalised. I must tell the Deputy Prime Minister that Banbury will refuse to be marginalised in that way.

Mr. Prescott: One envisages UDI for Banbury. We shall wait and see whether the people of Banbury agree with that.
The main argument, about democratic accountability, comes ill from a Government who abolished more democratically accountable bodies, established more quangos than anyone else and abolished the Greater London authority—the Greater London council—which we are now reintroducing because it is necessary for democratic accountability.
It is inevitable that the development agencies are part of an evolutionary movement towards democratic accountability, but we do not want to wait for legislation to be passed, which would take a long time. We believe that the English regions need the economic instruments, such as the development agencies, to get on with the job now. Each development agency would be accountable to authorities in the area—admittedly, indirectly, but that is better than nothing, which is what the regions had under 18 years of Tory Governments.

Mr. Gerry Steinberg: As a Member from the northern region, hon. Members from which have been among the main instigators of regional government for the past 20 years, I congratulate my right hon. Friend the Deputy Prime Minister on his statement. We deeply approve of it and strongly support him. Regional assemblies are a wonderful thing as a first step, but will my right hon. Friend give us an idea of when the Government will move towards democratically elected regional assemblies, which is our ultimate aim in the northern region of England?

Mr. Prescott: I certainly understand my hon. Friend's point regarding regional assemblies as an alternative to democratically elected bodies. I have a preference—I think all parliamentarians would—for democratically elected bodies.
There are arguments about whether all regions want regional government, but I believe that they eventually will if they do not at present. If we decide that we want to achieve any form of regional government, we need only consider the structure of local government to realise how many questions arise. If one wants to make the change to regional government, with unitary authorities, it begs the question of the role and structure of local government. Will there be unitary authorities? Will there be county councils? Will there be regional government?
Anyone with experience of entering into such issues knows that the discussion process takes one or two years, quite apart from what is usually a controversial progress through the legislative process. That is why we have said that it would be difficult to envisage achieving that structure in the remainder of this Parliament. That is not to say that we shall not give active encouragement, especially in the northern areas, where there are well-developed bodies of accountability, which may be


able to provide a model for us until we achieve the final objective, which I believe should be a form of regional government.

Mr. John Wilkinson: May I remind the right hon. Gentleman that he is proposing an extraordinary duplication of functions for London? He said that the London development agency will be responsible for inward investment, transport and planning, all of which, according to the Minister for London during the passage of the Greater London Authority (Referendum) Bill, are functions which will be undertaken by the Greater London Authority.
Who will pay for the Greater London development agency? Will it be paid for through a surcharge on the uniform business rate? Will it be a precept on the boroughs? Does the right hon. Gentleman not realise that the CBI's London region and the London chamber of commerce put as a priority for London what he has singularly failed to deliver—investment in, and a way forward for, London Underground?

Mr. Prescott: The last point about investment in London Underground comes a bit ill, given the disinvestment in London transport during the past 18 years. London Transport wants some £7 billion to modernise its infrastructure. A Greater London Authority will be able to deal with that much more effectively than a central Government. The previous Government took over that function from the GLC, which was doing much better at it than they did.
The hon. Gentleman must not make the mistake of comparing the English regions with our proposals in the London Bill, which introduces accountability and establishes an elected authority. There will be a separate transport body, accountable to the London authority, and the development agency will also be accountable. I am told by London business—they have said so publicly—that a development agency would not need subsidies or moneys. They believe that it could be used effectively in public-private partnerships, along with whatever other resources are made available, to develop the London economy. We look forward to seeing that being done.

Mr. Jim Cousins: I hope that you will forgive me, Madam Speaker—I am not entering myself for Creep of the Week award; nor would I attempt to make my right hon. Friend blush, because the task is impossible. However, I congratulate him on 20 years of principle and persistence that have brought him to his statement in the House today. We in the north-east thoroughly support him on it.
I congratulate my right hon. Friend on what he just said about regional assemblies. However, will he take due note of the fact that, while we accept that, within the financial limitations with which this great enterprise is beginning, his comments about budgets must be acceptable to us and we shall work within them, we want a proper regional needs assessment for the English regions in the lifetime of this Parliament?

Mr. Prescott: I thank my hon. Friend for his comments. I accept his argument. In earlier publications

on the regions in which I was involved, I pointed out that regional needs assessment had been achieved in my hon. Friend's area. I think that it was the only region in which such an exercise was carried out. It is necessary to make sure that we have a level playing field, and we certainly have that in mind.

Mr. Alasdair Morgan: In relation to the proposed concordat on inward investment and the waste of money to which the Minister referred, can he give some specific examples of where money has been wasted under the existing arrangements?

Mr. Prescott: One of the problems with regard to how much grant has been given to inward investment in the past is the fact that the previous Government constantly claimed that it was commercially sensitive information, and the information was not made available. We have seen some information, though not enough to arrive at that conclusion.

Ms Candy Atherton: May I also congratulate my right hon. Friend on his statement? He will know that in Cornwall the development agency is a burning issue. Will he outline for my constituents the benefits that they can look forward to through a development agency?

Mr. Prescott: I remember one of my first visits to the south-west. I listened to people in Devon strongly disagreeing with people in Cornwall, and they both hated the city of Bristol. It taught me an important lesson: do not make the mistake of thinking that when one talks of a region, one is talking for the whole region; there are strong and competing interests in sub-regional economies.
That is why we have left sufficient flexibility in the development agencies. They are statutorily based and can assist all other forms of voluntary agencies, such as those in Cornwall and Devon. The RDAs will work with voluntary agencies to develop their region's potential, to make sure that the resources and the packaging are available, to bring together the assets necessary to persuade inward investors and, more important, to help to develop the local and regional economies. We will give them the tools to get on the job. I have no doubt that people in Cornwall, Devon and the south-west will want to get on with it, provided that we supply the tools, which we intend to do.

Mr. Richard Allan: Can the right hon. Gentleman assure the House that when he makes appointments to the regional development agency boards from among the locally elected representatives, he will pay due regard to the political balance in each region, and will not just look to the majority parties, so that we do not end up with all-Labour representatives in Yorkshire and Humberside, or all-Liberal Democrats in the south-west?

Mr. Prescott: Clearly, we would wish to achieve a balance, but one that reflects the regional priorities. In most of these public appointments, the Nolan committee rules will apply.

Mr. Ian Pearson: May I warmly welcome my right hon. Friend's statement as an important


step towards developing effective regional economic development strategies aimed at competitiveness? May I tell my right hon. Friend not to listen to the Opposition spokesman, the right hon. Member for Sutton Coldfield (Sir N. Fowler), who is a west midlands business man, but just about the only business man in the west midlands who is against an RDA? The proposal has the overwhelming backing of the west midlands regional Confederation of British Industry and the west midlands chambers of commerce.
How do my right hon. Friend's proposals fit in with the assets and liabilities of urban development corporations and of the Commission for the New Towns? Furthermore, what freedom will RDAs have to take an axe to the red tape that currently surrounds the single regeneration budget?

Mr. Prescott: That is an important point. We are looking at the urban development corporations—there are about eight of them, which we will wind up—and the Commission for the New Towns. We intend to put them into one body, which will share a common chairman with the Commission for the New Towns and English Partnerships, performing some of the national functions and roles of those bodies, as we outline in the White Paper.

Sir Michael Spicer: Does the right hon. Gentleman accept that the income differences that were used in the past to justify vast differentials in subsidies between England and Wales no longer exist?

Mr. Prescott: Regional grants and assistance are under review in Europe, as the hon. Gentleman knows, and the boundaries are being considered. We must await that review in order to make a proper assessment

BSE

The Minister of Agriculture, Fisheries and Food (Dr. John Cunningham): With permission, Madam Speaker, I should like to make a statement on bovine spongiform encephalopathy.
The first priority of this Government is protection of the consumer. I am making this announcement in response to the latest advice from the Spongiform Encephalopathy Advisory Committee, which met yesterday, 2 December, and to outline the action that I intend to take on a strictly precautionary basis. I shall publish SEAC's advice in full, and a copy has been placed in the Library of the House.
SEAC has reviewed new evidence, which will be published in the scientific literature in due course. That evidence has emerged from an experiment designed to recheck which parts of cattle may contain BSE infectivity. Under those experimental conditions, in which animals were fed large doses of BSE-infected material by mouth, my scientists have found infectivity in nervous tissues called the dorsal root ganglia, which lie within the bones of the spinal column and would be left with the bone when meat is cut off the spine. The dorsal root ganglia are not currently covered by the specified bovine material restrictions.
Further new findings, which are still being evaluated, indicate that infectivity may also be found in the bone marrow in cattle that are at a very late stage of disease and are already showing clinical symptoms.
In both cases, the experimental animals showed the infectivity only at ages of more than 30 months, above which all cattle are excluded from the food chain and destroyed under the over-30-months scheme, and only after receiving a heavy dose of infected bovine tissue. In any case, consumers would not normally eat dorsal root ganglia as such.
Muscle, meat and blood are tested at every stage of the same experiments, and all results are negative.
SEAC has emphasised that the risk is very small. The committee has suggested that there are three possible alternative courses of action: first, to make public the research findings, together with its assessment of the risk, and to leave individual consumers to choose which precautions to take; secondly, to require that no beef with the bone in from cattle over six months old should be sold to consumers; and, thirdly, to require that cattle slaughtered between 24 and 30 months of age for human consumption should be deboned under official control by the Meat Hygiene Service in licensed plants.
Taking account of the views of the chief medical officer, Sir Kenneth Calman, who advises me on these matters, I have concluded that I should take further action. It would not be acceptable to allow tissues shown to transmit BSE to remain within the human food chain. I shall therefore be consulting as rapidly as possible with consumers and the industry on proposals to implement the second of the options indicated by SEAC: the deboning of all beef, whether from home supplies or imported, coming from cattle over six months old before it is sold to the consumer.
It is helpful that, currently, only about 5 per cent. of beef is consumed on the bone. The proposals would allow deboning to take place in cutting plants, butchers'


shops, catering establishments or other commercial premises, but would not allow the bones to be sold, given to consumers, or used in the preparation of food. That is in line with SEAC advice on that point. This action, which is being taken on a precautionary basis, will ensure that United Kingdom consumers continue to be given the highest protection possible against the risks from BSE while we press ahead with our determined action to eradicate this disease completely from our cattle herd.
I know that this announcement will come as a further disappointment to our beef producers. My message to them is that this Government are acting firmly and rapidly to protect consumer confidence, which is in the fundamental interests of the beef industry. We are maintaining a high level of support through the over30-months scheme, direct aid and other measures worth nearly £1.5 billion this year.
I regret that this important matter was the subject of a leak earlier today—although not from my Ministry—which resulted in my having to respond to the high level of media interest prior to making this statement in the House.

Mr. Michael Jack: I thank the Minister for giving me a copy of his statement in adequate time, so that I could read it before he put it before the House. I appreciate his courtesy.
The official Opposition support any moves that help to make British beef safer—indeed, to make it the best beef in the world. However, does the Minister recognise that his statement today will be of great concern to the quality butchery trade, which has done so much to rehabilitate the prospects for British beef after the most serious crisis the beef industry has ever known? Does the Minister further recognise that farmers who raise long-maturing animals will be extremely worried by his comments? I should be grateful if the Minister, in the course of his consultations, fully took into account the views from those two important parts of the meat business before casting the measures absolutely in stone.
At the conclusion of his statement, the Minister mentioned that there had been a leak. That has perhaps forced him to come to the House this afternoon to make a statement. Will he confirm that, in the light of the information that he received from SEAC, he was minded to make a statement to the House tomorrow rather than today? May I register my annoyance that it was from journalists this morning that I first learnt that a statement was to be made to the House? As soon as I learnt that, I found statements on the matter appearing on Ceefax, from the middle of the morning onwards. Only later did I officially learn from the Ministry that it was to make a statement. Would the Minister like to give us a timetable of the thinking that lay behind the approach to his statement today? Will he tell us when he received SEAC's conclusions and the written report? Will he also tell us when he discussed the matter with the chief medical officer?
Can the Minister tell us whether he has launched an investigation into how the journalist Mr. James Erlichman was able to release on to an unsuspecting world information about the statement in the rather aptly named BBC television consumer programme, "The Really Useful Show"? Will the Minister hold an inquiry into the leak? It is

a pity that he is not taking those important matters seriously, because he will know that once SEAC has come to a conclusion, there is always potential for a leak, and it is incumbent on Ministers to come to the House and present their findings without delay.
Will the Minister also enlighten us on the role that the Prime Minister played in the decision-making process in the Government, in regard to the making of the statement today? Does the Minister agree that the leaking of information is damaging to confidence in British beef?
In the light of the Minister's statement, will he now argue that the materials in question—the subject of his statement—should be added to the list of European specified risk materials? Will he confirm that they are currently not on that list? Will he further confirm that their addition to the list would be important in conferring on British citizens who travel abroad and eat beef the same protection that they can expect to receive in this country? Can he tell us how, in terms of third-country imports, he will police adherence to the ban? Does he agree that his announcement might be a further setback to the chances of getting the beef ban lifted?
The Minister has been long on rhetoric but short on delivering results on the beef ban. In the light of the fact that he has come to the House in haste, will he go to Brussels to explain to our European partners exactly what this is all about?
What costs does the Minister expect the meat and butchery industry to incur as a result of the statement? If, as he has said, his announcement will help to improve the safety of British beef, is not it ironic that he makes his statement at a time when he is tearing the guts out of the British beef industry? He is taking away £60 million in hill livestock compensatory allowances. He is overcharging the beef industry on cattle passports. He is levying the industry on the new meat inspection charges. His Government's monetary policy is making the cost of farmers' borrowings, which are rising, increase.
In short, the statement shows that the Minister is out of touch with farming and could not care less about the beef industry.

Dr. Cunningham: The right hon. Gentleman began by saying that he would support any moves to protect consumers, and then went into a long ramble about why he thought I was making this statement today. I had every intention of making a statement on the SEAC report. I said within days of my appointment that I would publish SEAC advice as quickly as possible after receiving it, and make statements. I have kept that promise to consumers and the country as a whole today. It was always our intention that a statement should be made. He asked what role the Prime Minister had played. The Prime Minister played the role that any normal Prime Minister would: he agreed that I should make a statement to the House, and that was that.
As for the serious part of the right hon. Gentleman's questions. as opposed to all the nonsense about the leak in the media, of course I understand that farmers are worried, as are consumers. I am also concerned, but is the right hon. Gentleman suggesting that we should have suppressed this information, and that we should have refused to act on SEAC's advice and kept the matter quiet? Is that what he would have preferred? If that is the implication of his shenanigans about how the information


has been disclosed, I know on which side of the argument I stand. I am fully in favour of being candid with consumers about the nature of the risks that they face. I emphasise that, notwithstanding the fact that the risk is very small, we should not take the risk of infected BSE material being allowed into the food chain. That is the basis on which we have taken this action.
There was never any intention to make this statement tomorrow. I do not know where the right hon. Gentleman got such twaddle from, but it is simply not true.
I have informed our partners in Brussels of this statement to the House and the reasons why I am taking this action. My officials are in constant touch with them about the actions that we are taking on BSE.
The right hon. Gentleman asked me about consumer confidence in the beef industry. It is precisely because we have acted promptly and fully on SEAC advice, and because we have imposed the most rigorous standards on our beef, that I am able to say with confidence that beef is safe. That is also the basis on which I am able to say in Brussels and in the Council of Ministers that we have a good case for a progressive lifting of the ban. If I were not to act in that way, it would undermine our ability eventually to get the ban lifted.

Jacqui Smith: I welcome the speed with which the Government have acted today in response to the SEAC evidence. However, that evidence will be greeted with concern in my constituency, especially by the family and friends of Mike Clifford, who sadly died of new-variant Creutzfeldt-Jakob disease in June 1996. In the light of the tragedy of new-variant CJD and today's statement, is it not important for the Government to announce soon a full inquiry into the previous Government's handling of BSE and the links with new-variant CJD?

Dr. Cunningham: I well understand the concern expressed by my hon. Friend on behalf of her constituents and others. I know at first hand of the concern of parents who have lost loved ones through new-variant CJD, because I have met some of them. One of the young women who died was a close friend of my son and had studied with him at university. I am well aware of the dreadful circumstances for those families, and I understand the pressure for a full inquiry into all aspects of the matter. I am having urgent and continuing discussions with my right hon. Friends, but I am sorry that I cannot make an announcement about a decision today. Obviously, I would have done so if I could.
As a consequence of the previous Government's mishandling of these issues, the British taxpayer provides about £;1 billion to support our beef industry. That is the price we are paying for the consequences of the BSE crisis, in addition to the appalling consequences for the health and well-being of young people.

Mr. Charles Kennedy: Given the seriousness of the Minister's statement, does he acknowledge that, although he describes this development as a further disappointment for the beef sector, it would not be an exaggeration to say that it is another desperate blow to the morale of that sector? It may have the practical impact of sending several specialist producers to the wall as a result of the changes that will, alas, have to be implemented.
while acknowledging the importance to importation of a level playing field throughout the single market, will the Minister consider a far more important time scale than the one to which the right hon. Member for Fylde (Mr. Jack) referred when he spoke such fatuous nonsense? Will the Minister deal not with the time scale of events over a few hours this morning, but with the time scale of events in the months ahead that will affect our vital domestic beef sector?
I return to the exchanges at Prime Minister's Question Time between my party leader, the right hon. Member for Yeovil (Mr. Ashdown), and the Minister's own. The Prime Minister said on the issue of importation that we would "expect the same" standards elsewhere in Europe. Will the Minister confirm that "expect the same" means "ensure the same"? The Prime Minister spoke about acknowledging the need to mitigate the financial consequences of this afternoon's statement. Will the Minister assure us that mitigate means compensate, not least in the context of the cuts in the hill livestock compensatory allowances, the strength of the green pound and the constraints that the new Government have put on the over-30-months scheme?
Will the Minister confirm that, as part of the continuing strategy to get the beef ban lifted throughout Europe in the interests of this country, the sooner he can announce a full public inquiry into the entire history and handling of the BSE issue, the better it will be for all of us?

Dr. Cunningham: Of course, I understand how beef producers feel. After all, I represent many of them in my constituency and I met some of them recently. However, the fact remains that the overriding priority is to safeguard consumers and people's health and well-being. That has to be our first priority and that is why I have acted in the way that I have.
Of course, I do not want to do unnecessary damage to either farmers' morale or confidence in British beef. That is why I repeat that British beef is safe. I repeat also that the tests on this material were also carried out on meat and blood and showed negative results. It is safe to eat and to export British beef. I shall go on arguing that in Brussels.
The hon. Member for Ross, Skye and Inverness, West (Mr. Kennedy) asked me a question about a level playing field for imports. I remind the House that it was on my initiative—indeed, on my insistence—that, last July, the Council of Agricultural Ministers voted to take a uniform and rigorous approach to safeguarding beef. That decision will take effect for all imports of beef from our European partners from 1 January. I am not willing to tolerate any slippage of that decision—that will happen from 1 January. If, for some reason, it did not, I would revert to my position of taking unilateral action against any beef imported to this country. I hope that I do not have to do that. The decision has been taken, and I want it to be implemented from 1 January.
What the Prime Minister said about imports is the same as what I have just said: we shall insist that imported beef is treated in the same way as we treat our own.
I cannot make any promises about extending compensation.

Mr. Elfyn Llwyd: Why not?

Dr. Cunningham: From a sedentary position, the hon. Gentleman asks, "Why not?" Our support for the beef


industry totals almost £1.5 billion. It is easy for hon. Members to go on demanding just more and more. The right hon. Member for Fylde (Mr. Jack), the Conservative spokesman, did that, too. As a former Agriculture and Treasury Minister in the previous Conservative Government, he bears a large measure of responsibility for the problems and circumstances that we face, and he should be the last person to demand more and more public expenditure.

Mr. Barry Jones: I thank my right hon. Friend for his timely, serious and necessary statement. May I tell him of the fearfulness and desperation of beef farmers on the hillsides in my constituency? In Flintshire, I met the president and county delegate of the National Fanners Union and they told me of the need for a level playing field. I very much support my right hon. Friend coming to the House as he has, but just hope that he may be able to give some crumb of comfort to beef farmers.

Dr. Cunningham: I am grateful to my hon. Friend. Like me, he has represented hill farmers for 27 years in the House. I know that he maintains strong links with them and has their best interests at heart. I have already made it clear to the House that I shall insist on a level playing field with regard to beef imports.
I forgot to respond to the final question asked by the hon. Member for Ross, Skye and Inverness, West, which related to a public inquiry, although I had made my position clear in response to a question from my hon. Friend the Member for Redditch (Jacqui Smith).

Mr. Douglas Hogg: I have every sympathy with the agriculture industry and the fact that this statement has had to be made. That sympathy extends to the right hon. Gentleman and his colleagues. I greatly welcome the decision to put the SEAC report in the House of Commons Library and otherwise to publish it. Assuming that the contents of that report underpin what the right hon. Gentleman has said, he will have my support for the measures that he has outlined.
I have three specific questions. First, is it necessary to apply this regime to cattle born after 1 August 1996, having regard to the fact that there can be no cross-contamination from that date and also having regard to the fact that the right hon. Gentleman has already announced a cull policy based on vertical transmission?
My second question relates to consumption and price. Will the right hon. Gentleman please give an undertaking carefully to monitor whether there are substantial falls in either consumption or price so as to be better informed about whether further compensation is necessary? Thirdly, has he already had discussions with the two relevant Commissioners—Fischler and Bonino—with a view to a Europewide regime of the kind that he has just announced for the UK? He will have strong support from Conservative Members if he presses for such a regime.

Dr. Cunningham: I am grateful to the right hon. and learned Gentleman for his expressions of understanding

and support. He has, after all, stood at the Dispatch Box in very similar circumstances. I think that he will be able to satisfy himself when he sees the copy of SEAC's advice, which is available in full, that I have made this decision and am making this announcement on the properly supported basis of its advice.
The right hon. and learned Gentleman asked whether it was necessary to apply this decision to all cattle. Let me give a practical example of why it is necessary and why I rejected one of SEAC's propositions on cattle under 24 months as opposed to those between 24 and 30 months. It is impossible for butchers in receipt of meat to know the age of that meat. It is also impossible for consumers to make the distinction, so the simple, clinically unambiguous way to guarantee that there are no errors, mix-ups, cheating or confusion is to ensure that all beef is sold after it has been deboned. They are the reasons why we came to our conclusion after very careful consideration. I shall, of course, consult the industry urgently about that, but it is my intention to lay an order as quickly as possible to give effect to the conclusions that we reach.
I shall, as we do now, continue carefully to monitor the consumption and price of beef. The sales and consumption of prime cuts of beef are now higher than before the original BSE crisis hit. Of course, that is not true for all beef, but it is for prime cuts. I repeat that I am taking these measures on a precautionary basis. There is a very small risk, but I am in no doubt that British beef is safe to eat. I eat British beef and I will continue to do so.
I have tried to make personal contact with Commissioners Fischler and Bonino today by telephone, but was unable to do so. However, my officials have been in touch with their officials and I have written to them both, explaining the basis of the decision and the background.

Dr. Lewis Moonie: Does my right hon. Friend accept that he has done more in the past six months to restore confidence in the beef market among consumers than the previous Administration managed to do in five years? Does he agree that, at a time when new CJD cases are still arising in our population, it would be mad to do anything other than accept SEAC's recommendations? Will he also assure the House that standards in slaughterhouses and meat processing plants are now adequately supervised by inspectors, ensuring that no contaminated meat enters our food chain?

Dr. Cunningham: I am grateful to my hon. Friend, who—because of his experience, knowledge and qualifications in medicine—is well placed to speak in the House on those issues. I absolutely share his view that it would have been a serious dereliction of my duty and responsibilities had I decided not to publish the report and not to act upon it. They are the responsibilities that fall to me in my current post, and I do not shirk them.
My hon. Friend's final point was important. We have taken considerable action—we continue to do so—to improve hygiene and supervision levels in our slaughterhouses and meat cutting plants. I have closed down meat plants when it has been necessary. It has been necessary to do so and, if it becomes necessary again, I shall not hesitate to do so again. I have withdrawn those


operators' licences and destroyed the meat in those plants, to be absolutely sure that we can satisfy British consumers and our European partners that we shall take every precaution that it is possible for us to take.

Mr. David Curry: The right hon. Gentleman will know that one of the immediate risks of the statement, which I accept that he had to make, is that there will be a further fall in beef prices at auction marts. He will know also that prices are already very low indeed. Will he therefore, at the very least, seek from the Chancellor of the Exchequer the means to maintain the level of grant—particularly HLCAs—to farmers? The request has nothing to do with the green pound, but is related to grant levels and HLCAs, so that the Minister may give at least some very small support to farmers—given that suckler herds and upland farmers will be the ones who will, yet again, feel the heaviest draught from the announcement.

Dr. Cunningham: I am grateful to the right hon. Gentleman for his understanding of the absolute necessity for me to make the announcement and to take my decision today. I appreciate his comments in that regard. I understand very well his valid point that the statement may act further to depress beef prices. I hope that that will not occur—which is why I reiterate not only to hon. Members but to the public that it is safe to continue to eat British beef. Given the rigour with which we safeguard our beef, I am able to say that our beef is as safe as, if not safer than, that produced anywhere else in the world. If I were not taking those decisions, it might be less easy to make that claim.
As for the hill livestock compensatory allowance payments, the right hon. Gentleman and Conservative Members know that the previous Administration made a one-off additional payment to hill farmers, but made no continuing provision for that extra support. We fought the general election on the clear statement that we would stick within the public expenditure totals proposed by the then Conservative Government and voted for by every right hon. and hon. Member on the Conservative Benches.

Mr. David Drew: I welcome my right hon. Friend's prompt statement, which is in marked contrast to the fiddling and faddling of the Opposition, as they now are. Although I understand the need for the statement, we on the Labour Benches understand how beef farmers must be feeling today. I am sure that the Government will take cognisance of the effects on farmers. We place prime importance, however, on the safety of the food that consumers eat. Will my right hon. Friend therefore ensure that the food standards agency is established at the earliest possible opportunity?

Dr. Cunningham: I am grateful to my hon. Friend for his support for what is indeed prompt, urgent action. We shall continue to act promptly and urgently whenever circumstances so dictate. I understand that he knows very well, from experience in his constituency, the views and problems that beef farmers face. I share his view that the safety of consumers is of primary importance. As for his question about the food standards agency, I hope that we shall publish a White Paper on our proposals before too long.

Mr. Andrew Welsh: Does the Minister accept that computer traceability and certification are essential to

a solution, yet in 14 months, the Tories did nothing, and after seven months, the Labour Government have done nothing? Will there be proper research and monitoring? Now that T-bone steaks from top-quality, grass-fed Aberdeen Angus herds are to be banned, how long will this costly, disastrous farce continue?

Dr. Cunningham: I do not know where the hon. Gentleman has been. I can understand his comments about the previous Administration doing nothing on cattle traceability, but has he missed the announcement that we shall locate the cattle traceability service in Workington; that we have obtained the site; that the site is being equipped; and that we are about to appoint the head of the service? Has he had his head in a haystack? The Government have been acting from the very first day after the election to install a computer-based cattle traceability scheme for the whole national herd. I am proud of the record of my hon. Friend the Minister of State in rapidly carrying that work forward. I am also proud of the fact, incidentally, that in doing so, we shall create 250 jobs in the constituency of my hon. Friend the Member for Workington (Mr. Campbell-Savours), where they are desperately needed.

Mr. Nick Ainger: I thank my right hon. Friend for his statement and the prompt way in which those matters have been brought before the House—unlike what happened under the previous Administration. I am sure that he is well aware of the desperation, especially among Welsh farmers, and of the blockades that, unfortunately, have occurred over the past two days. Clearly, they have been prompted by the collapse in the market price for their product. Over the period during which there has been a substantial reduction in the price of beef in our marts, that has not been reflected in the price that consumers pay in supermarkets.
Will my right hon. Friend do two things? First, will he assure the House and the country that, following the measures, consumers can have total confidence in Welsh—and British—beef that is and will be on sale? Secondly, will he speak to or call in the heads of supermarkets—including Tesco, which was responsible for the importation from Ireland of the beefburgers that prompted the problem in Holyhead—to explain why the price of beef in our supermarkets does not correspond to the low prices in the marts and why they are continuing to import products that could be sourced in Britain?

Dr. Cunningham: I am grateful to my hon. Friend for his expression of support for the decision that I have taken today. In respect of the action of beef farmers in Wales, I should say that illegal action will be met with the full consequences and rigour of the law. We cannot tolerate illegality from farmers. Not only is that so, but such action totally undermines our position when we complain—as we have and as the previous Government rightly complained—about similar action in France, which affected our meat exports. It is simply unacceptable for Welsh or any other farmers to take to the streets and act illegally.
I should explain to those farmers that such action is totally counter-productive for them; it damages Britain's interests in Europe. In the case of Irish beef, the Republic of Ireland has been one of our staunchest supporters in


trying to get the beef ban lifted. When I am working in Brussels to build coalitions of support for our position and our beef industry, nothing could be less helpful than such action day in, day out against the legitimate exports of our European Union neighbours. There is a single market in beef in the European Union. That brings us obligations as well as opportunities. I strongly urge all farmers to bear that in mind, because such behaviour is damaging the interests of the beef industry and the interests of Britain.

Mr. William Cash: Does the Minister accept that this morning his officials were reported as saying that the risks to human health were remote? He has said that the risks are very small. Does he accept that the hard-pressed British beef producers, farmers and retailers are likely to be deeply concerned by what he has announced, not least because of the devastation that they have undergone over the past couple of years? Does he further accept that what he has described as a precautionary measure is a panic measure and that he is as interested in protecting his back as he is in the statement that he has just made?

Dr. Cunningham: The hon. Gentleman's comments are patently absurd and irresponsible. Can he contemplate a Minister who had received on the record advice from an independent scientific body refusing to act to safeguard people's health and well-being? That would be an untenable position for any Minister. Of course the risk is very small, but there is a risk. It was my duty to take action to remove that risk in the interests of the people of this country. I have done so legitimately on the basis of sound, independent scientific advice.
I meant to tell my hon. Friend the Member for West Carmarthen and South Pembrokeshire (Mr. Ainger) that I shall discuss his comments about beef purchasing with the supermarkets.

Mr. Eric Martlew: My right hon. Friend knows that a constituent of mine died from CJD. I should like to press him further on a public inquiry. We have spent billions of pounds on the crisis and slaughtered hundreds of thousands of cattle. Unfortunately, at least 20 people have died. The tragic reality is that there will be more. When will a decision be taken on a public inquiry? My right hon. Friend the Prime Minister said earlier that there would be a statement on that.

Dr. Cunningham: I am grateful to my hon. Friend for his support. As I have already told the House, it would have been good—and, I guess, appropriate—if I had been able to announce our conclusions on a public inquiry. I regret that I am not able to do so. I emphasise that urgent discussions are continuing on that. I understand my hon. Friend's concern about the death of one of his constituents from new-variant CJD. In fact, 22 people have died. We are advised that more deaths are predicted. The human costs of the tragedy are immense. The financial costs are in excess of £2 billion and increasing rapidly. To date, 1.9 million cattle have been slaughtered. That is the legacy in the beef industry left to this Government and this country by the Conservatives.

Mrs. Angela Browning: Livestock farmers in my part of Devon will be hard hit

by today's announcement, but I understand why the Minister had to come to the House and make his statement. I should like some clarification. He mentioned how deboning will be handled in catering establishments and butchers' shops. Those bones will not be available for sale to the public or for use in any form of catering establishment. How does he intend to differentiate in butchers' shops between bovine bone and other mammalian bone or between bones from animals over six months and veal bones from animals under six months? Is it his intention to designate bovine bone as specified bovine material, with the attendant requirement for staining and disposal, which the slaughterhouses are used to, but which would cause considerable problems in butchers' shops?

Dr. Cunningham: The hon. Lady asks some important questions, and I understand her concern about beef farmers in her constituency. I share it, and if it is possible to do more to help beef farmers, the Government will do so. As for her specific question about bones, we do not intend to designate bones as specified bovine material. They will be removed in butchers' shops and other catering establishments, as I have said, and they will not be available to consumers or to pass into the food chain, so the second part of her question about staining bones simply will not arise. The hon. Lady also asked about veal bones, but the restrictions will not apply to animals under six months old.

Mr. Martyn Jones: Will my right hon. Friend note that there have been no calls for an inquiry from Conservative Members? That is because, were we to have an inquiry, it would show the farmers who were the architects of their disastrous state.

Dr. Cunningham: I am grateful to my hon. Friend for making the simple point that the Conservative party has been noticeably silent on the need for a public inquiry into all the issues.

Mr. William Thompson: Does the right hon. Gentleman realise that he is taking fear of beef infection to an extreme? The test was carried out under extreme conditions and, despite those conditions, no animal under 30 months showed any infection. Surely that was a positive result, which confirms the existing policy. Instead of putting more pressure on our farmers, the Minister should have taken the first option suggested by SEAC—
to make public the research findings"—
and allowed the public to make up their own mind.

Dr. Cunningham: The hon. Gentleman suggests that I should deliberately and constructively allow infective BSE material into the human food chain. I simply am not prepared to do that.

Ms Rosie Winterton: Is my right hon. Friend aware that one of my constituents, Matthew Parker, died earlier this year of new-variant CJD and that his family have called for a public inquiry? One of their major concerns is that information about BSE should be made public, as my right hon. Friend has done today, and not concealed, as some Conservative Members seem to wish.

Dr. Cunningham: I express my sympathy and condolences to my hon. Friend's constituents. I was


pleased to note that a spokesperson for the CJD support group welcomed the prompt and clear action that I have taken in the matter.

Mr. Tony Baldry: The Minister said that he would consult. Given that the experiment involved heavy doses of heavily infected BSE material being fed to cattle and that, even in those circumstances, only cattle over 30 months were found to have very low infectivity, will he consider the suggestion made by my right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg), that the Minister should excuse from the scheme cattle born after 1 August this year? One has to make some distinction. Will the Minister promise the House that he will consult with an open mind, because his proposals will have a devastating effect on the beef industry and the high end of the butchering market, which has done so much to help to restore confidence in beef in recent months?

Dr. Cunningham: I shall consult urgently on those issues, and I expect to lay orders quickly after that consultation period.
To return to the point made by the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg), I explained in some detail why I could not do what he suggested: it would be confusing and difficult to administer and control. The simplest and most effective response to the problem is to ensure that all beef is sold off the bone. Customers and consumers will understand that clearly, and it will avoid unnecessary complications and different processes for butchers.
I trust the butchers, and I acknowledge what the hon. Member for Banbury (Mr. Baldry) said: they have worked hard and done a great deal to help to restore confidence in British beef. I am sure that they can continue to do so, even though I acknowledge that there has been something of a setback.

Dr. Tony Wright: I thank my right hon. Friend for the speed and candour of his statement. If SEAC routinely made available its proceedings, would not that remove the need for the regular leaks and urgent statements?
I want to take up the point that has been made by all parties save one, about the need for a public inquiry. Is not it extraordinary that this catastrophe for public health, the beef industry and the public purse, which may have been compounded by incompetence, has not yet been the subject of a proper full public inquiry? Would not that do more than anything else to begin the process of restoring public confidence? If my right hon. Friend cannot give us the details, will he at least tell us in principle that he wants an inquiry and that it is not being blocked by producer interests?

Dr. Cunningham: I am grateful to my hon. Friend for his opening remarks and his support for the promptness and candour with which I have acted. SEAC concluded its deliberations only very late last night. It would normally be encouraged by me to give a brief statement of its conclusions, but it did not have time even to do that in this case. I regret and greatly deplore the fact that its advice to me was leaked.
I am delighted to have the support of my right hon. Friend the Secretary of State for Health in the Chamber today, and I share his view that there are strong arguments

for a public inquiry into all aspects of these matters, but I assure my hon. Friend that no one among the producers has sought to exercise any influence on me as I present the arguments and continue the discussions, as I must do, with Government colleagues about the decision, which is not yet made. As soon as we reach a conclusion, I shall want to make a statement.

Mr. Elfyn Llwyd: The right hon. Gentleman began his statement by saying that food safety was a priority. I do not think that anybody would argue with that, but what priority is given to the livelihood of thousands of farmers? He has said candidly that he does not propose to take any steps to recompense the beef industry, which is in the absolute pits. How can he, as the Minister responsible, sit and watch the whole agricultural industry dissipate before our very eyes?

Dr. Cunningham: To suggest that the whole of British agriculture is disintegrating is somewhat over the top, even for the hon. Gentleman. [Horn. MEMBERS: "Livestock."] He did not say that; he said the whole agricultural industry.
As for what the hon. Gentleman says that I said, let me repeat what I in fact said: I cannot promise the House that there will be compensation.

Mr. Alan W. Williams: I congratulate my right hon. Friend on coming to the House immediately on receiving SEAC's advice. The consumer will want to know why the information was not available five or 10 years ago. Why was research on infectivity not carried out by the previous Government?
I add my voice to calls from all parties, except the Conservatives, for a wide-ranging public inquiry. I should like it to be on the pattern of the Scott inquiry, taking detailed evidence from witnesses in public, with cross-examination and expert analysis, so that we can find out what mistakes were made and who was responsible. Should not the previous Government have done far more five or 10 years ago to stop the disaster that now engulfs the beef industry?

Dr. Cunningham: The papers and decisions of the previous Administration are not available to me and my colleagues.

Mr. Williams: Why not?

Dr. Cunningham: Because that is the way in which British government operates. If my hon. Friend is dissatisfied with that, I share his view; but that is how things are, and I cannot change it just for the moment.
As any sensible Administration would, we have carried on—I want to be fair to the previous Administration—developed and expanded the scientific work on BSE that was set in train. As time has passed and the research has become more and more sensitive, new results have emerged. I have reported to the House on the latest of those results today, and I have announced the action that I believe to be necessary and about which I am urgently consulting.
My hon. Friend joined many other right hon. and hon. Members in pressing for a public inquiry. He will have heard what I said earlier on that subject.

Mr. Robert Walter: The most important message that should go out from our


deliberations this afternoon is that British beef is the safest in Europe. The Minister said that SEAC's experimental evidence was that the traces had shown up only in cattle over 30 months old and only in material that would not normally be consumed. Will he therefore reaffirm, for the benefit of the consumer, that no British beef that has been eaten in this country in the past 18 months contained any material that could lead to any risk of any sort of transmission of disease?
I accept that Mr. Fischler and Mrs. Bonino are not taking calls today, but is there in any way in which the Minister's actions today can bring forward, in the current negotiations, the date of the lifting of the export ban?

Dr. Cunningham: At least I can congratulate the hon. Gentleman on his first statement, that the most important message to send out today is that we are taking all the necessary action to ensure that British beef is as safe as any in Europe, and safer than most. I share that conclusion, but I cannot agree with the rest of what he had to say.
The reality is that, as we know, there is a long incubation period for the disease, so we cannot be certain that no beef containing BSE infection has been sold to consumers in the past 18 months; I cannot give that guarantee, because that guarantee cannot exist in the circumstances that have prevailed.
The hon. Gentleman made flippant remarks about Commissioners Fischler and Bonino. I wonder whether Conservative Members have learnt any lessons at all about our relations with our colleagues in the European Union. The fact, I understand, is that Mrs. Bonino is in Canada, and although we tried to track her down, it proved impossible. However, her office is well aware of what is happening, as is that of Mr. Fischler, to whom I talk regularly. I have cordial and constructive relations with them both, and I intend to maintain them, unlike the previous Government, because that is in the best interests of the United Kingdom.

Mr. Mark Todd: I should like to pursue the question raised by the hon. Member for Tiverton and Honiton (Mrs. Browning), about the status of bone within the food chain. My right hon. Friend has said that it will not be classified as a specified risk material in the future, so that leaves the status of the material in limbo and the arrangements governing its storage and disposal slightly in doubt. What arrangements has his Department made for the large amounts of material that will require disposal in the future?

Dr. Cunningham: As I made clear to the hon. Lady, bone will not be designated as a specified risk material. There is no question of a large amount of additional material being disposed of, because, as I pointed out and as my hon. Friend will recall, 95 per cent. of beef is already sold off the bone. Only a small amount of additional material is involved, and none of it will be allowed to be put to any use in the human food chain. Bone will be disposed of as it has been disposed of in the past when it has not been used in any manufacturing process.

Mr. David Heath: I recognise the difficulties confronting the right hon. Gentleman, but does he recognise the sense of desperation that will be felt by the farmers I met in Wincanton on Monday?
Will the right hon. Gentleman look very carefully again, at his leisure, at the scientific basis for the decision that he has taken, particularly the rather curious distinction that is made between dorsal root ganglia and the neural material in the surrounding tissue? Will he hold hard to his decision to refuse the importation of substandard meat into this country, as from three weeks' time? Will he look again, as the hon. Member for West Carmarthen and South Pembrokeshire (Mr. Ainger) has requested, at the behaviour of the large supermarkets and at the differential between the price of meat for sale in those shops and that on offer in markets? Will he also look again at compensation and perhaps consider using the contingency funds available to the Government, because our agricultural industry is facing a crisis?

Dr. Cunningham: As I hope the hon. Gentleman will recognise, I did not come to the House without giving very careful consideration to the advice that I have received. I have not come to a hasty decision, taken without proper contemplation of all the consequences. Of course I shall be consulting, but I believe that it is quite clear that action is necessary.
I can certainly give the hon. Gentleman the guarantee that he has sought in respect of imported meat. I have no intention of backing down on the issue. I made a concession when I accepted a delay in implementation from 1 October to 1 January, but I am not prepared to make any more concessions. I assure the hon. Gentleman that I therefore expect that decision to be implemented.
The hon. Gentleman asked me to ensure that I reconsider supermarket practices. I hope in the course of this evening, if these matters allow, to have consultations and discussion with a number of leaders of the food industry in this country. I have no doubt that they are listening to what is being said in the House about the matter.
As for the support for hill farmers in general and beef producers in particular—I understand why the hon. Gentleman has legitimately raised that matter—let me say again that the Government are providing in this financial year, for all the relevant measures, about £1.5 billion in total. That is substantial support, by any test; he and his right hon. and hon. Friends have spent that contingency reserve 10 times over on their various requests.

Mrs. Teresa Gorman: While supporting the right hon. Gentleman's concern about public health and expressing the sympathy of everyone in the House for the victims of CJD and their families, may I particularly welcome his statement that all scientific evidence must be followed up? He must be aware that SEAC has pointed out that the evidence linking the cattle feed to new-variant CJD sufferers is tenuous.
Will the right hon. Gentleman undertake to investigate the fact that a large historical collection, known as the Corsellis collection, of CJD material—9,000 specimens of brain tissue—taken from people who died from the disease in the 1950s and until recent times, before the current outbreak could possibly be attributed to their deaths, is held at Runwell hospital in my constituency? It remains to be investigated why those people died of that disease. Is the Minister aware that a scientist at Charing Cross hospital, Dr. Claire Royston, is unable to proceed with that investigation for want of resources?


That research could be extremely significant in either confirming or refuting the current thesis as to the cause of the CJD deaths.

Dr. Cunningham: We are pretty clear that there is a connection between BSE and new-variant CJD. The burden of scientific evidence leads to that conclusion. As for the doctor to whom the hon. Lady referred and the history of CJD, I am happy to receive advice and to look at evidence and scientific research, from whatever quarter it may come.
The Ministry is sponsoring a considerable amount of research into those matters, and we shall continue to do so. I am in no doubt about the connection between BSE and new-variant CJD.

Mrs. Caroline Spelman: The Minister is obviously reluctant to compensate the industry for the new costs imposed by the extra ban. Would it not have been possible to make a contingency payment for the evolving science of BSE from the £400 million underspend on agriculture, rather than letting the Chancellor have that money for use on another pledge in his green Budget?

Dr. Cunningham: I am not aware of any £;400 million underspend in my budget. If the hon. Lady is referring to the recurring nonsense uttered by the Conservative spokesman, the right hon. Member for Fylde (Mr. Jack), let me tell her for the removal of any doubt that there was not a word of truth in what he said. Such an underspend just does not exist.

Sir Michael Spicer: Why cannot the rules that affect the export of British beef to the continent of Europe be applied immediately to imports of beef from the continent of Europe? Why do we have to wait for 1 January? Is the right hon. Gentleman aware that his comment to the effect that that delay is some kind of a disappointment to the industry is the understatement of the year? The industry is now on its knees and surely he should do something about it immediately.

Dr. Cunningham: The hon. Gentleman has not taken much notice of what has been going on. If we are to get a European Union-wide agreement—

Sir Michael Spicer: Why do we have to have such an agreement?

Dr. Cunningham: Because there is a single market for beef in Europe, and that is the best way forward. In order to reach a European Union-wide agreement, it was necessary to agree on an implementation date of 1 January. I repeat to the hon. Gentleman and the House that the previous Government had every opportunity to take my approach to beef imports, but they signally failed to do so.

Mr. Tim Collins: Does the right hon. Gentleman accept that there is considerable sympathy and understanding for the difficulties in which he has been placed because of constantly changing scientific advice? That sympathy might be greater if he recognised that his need to follow such advice of the day was matched by his predecessors, who also followed it.
If we are to avoid the situation in which the Minister and his successors have to come to the House every six months from now until eternity to announce yet another new scientific development, will he look again at the scientific budget of his Department, which represents a small proportion of the £1.5 billion that he mentioned? He should think about expanding research so that he might get some final, consistent answers and so that policy could be consistent. Then, scientists would not keep on changing their minds and forcing him, as they did his predecessors, to change his mind.

Dr. Cunningham: I cannot agree with the hon. Gentleman that the scientific advice is constantly changing. The science and understanding of these terrible problems is evolving and developing; it is not changing. Scientists are becoming more and more systematic in their examination of the possible location of infection. I welcome that research programme. The way to resolve the problems is not to call for more expenditure, but to work deliberately, consistently and ruthlessly to eradicate BSE completely from the national herd. When we do that, the problems will have been resolved.
As for my Department's science budget, the hon. Gentleman says that it is small in comparison with £1 billion, which is true; but it is still a substantial science budget at £130 million a year. It is the budget predicted and supported by his right hon. and hon. Friends when they made their public expenditure proposals for this financial year. As a scientist, I am keen to extend, wherever possible, support for scientific research, but, in the present straitened circumstances of public expenditure, we in the Ministry have to look carefully at every pound we spend, whether in science or anywhere else.

Mr. Malcolm Bruce: Does the Minister accept that I do not take issue with his need to come to the House and make a statement in the light of information available to him? However, may I report the despairing phone calls that I have received from farmers in my constituency today and a call from Paris on a mobile phone from the chief executive of what used to be our biggest beef exporter? He is now struggling to export lamb and salmon to the continent and asking whether there is any point in keeping his business going, because he cannot cope with this trickle of announcements. We need to reach a position in which, first, we have a real prospect of eliminating BSE from the herd, and, secondly, we have in place a traceability scheme that is accepted by the European Union and will enable us to get back into the marketplace.
Finally, will the right hon. Gentleman think again about the cut in the compensation scheme for cull cattle? That has had two potentially damaging effects: it might halt the decline in the incidence of BSE just at the moment when the incidence is becoming extremely small, and it is devaluing the capital value of many farmers' herds, leaving them unable to survive. Will he think again?

Dr. Cunningham: I am pleased to be able to say that I agree with a great deal of what the hon. Gentleman says. To the constituent who called him on a mobile phone from Paris I would say, yes, there is a point in continuing. I recently attended the food fair at ANUGA in Cologne, where a great many Scottish food producers, from Orkney to the borders, were displaying their products and


demonstrating with considerable skill and success their ability to export food from Scotland. I made a point of visiting several of the stands, some of which displayed lamb and salmon products. There is a great deal of point in continuing, because there are enormous markets to be satisfied.
We are pressing ahead with all possible speed and deliberation to eradicate BSE from the national herd, and the hon. Gentleman is right to say that that is the way to resolve the problems. He is also right about traceability, and from our first days in office, my hon. Friend the Minister of State engaged consultants and took their advice. He has made a decision about where the traceability centre is to be located, and the buildings are being established as we speak. It will soon be operational, and I am delighted that we have made such good progress.
As for the over-30-months scheme, the hon. Gentleman will recognise that decisions about that scheme are made by the Beef Management Committee in Brussels and not by me personally. At the time of these changes, I said to the National Farmers Union that if it could come up with a different way—one that its members thought was fairer—of applying the decisions, I would try to get those proposals implemented instead. I should say here that I welcome the statesmanlike response of Sir David Naish to these problems and the measured way in which he has acted, which stands in stark contrast to the conduct of the right hon. Member for Fylde (Mr. Jack). Sadly, however, the farmers could not agree on a different way of proceeding.

Points of Order

Mr. John Home Robertson: On a point of order, Madam Speaker. This matter arises from a hearing of the Accounts Commission for Scotland held in Haddington last Friday, 28 November, to look into an excellent 1985 initiative by East Lothian district council. I have expressed my opinion of that matter in early-day motion 479.
My point of order arises from the fact that I have been advised that the chairman of the commission, Professor Percy, delivered a public rebuke of me for not being present at his hearing. Apparently, he said that
it was regrettable that the Member of Parliament had seen fit not to be present in view of the serious statement that he had made
in the early-day motion. Those present, including representatives of the press, got the clear message that the chairman thought that I had got my priorities wrong when I decided to vote in the House on Friday rather than attend his hearing. I have always understood that attendance in the House of Commons is the overriding duty of Members of Parliament, Madam Speaker, so may I seek your advice on the propriety of the chairman of a subordinate body telling a Member of Parliament that attendance at his quango is more important than voting in the House?

Madam Speaker: The hon. Gentleman gave me some indication of the point he intended to raise, but there is little that I can usefully say in response. I have not seen a transcript of the comment to which the hon. Gentleman refers. Obviously, all Members of Parliament find that there are conflicting calls on their time most days, but I am aware that many hon. Members decided that the right place for them to be last Friday was in the Chamber. If that meant that some outside bodies felt disobliged by hon. Members' inability to attend their proceedings, that is to be regretted. Although I do not think that any further comment or special protection from me is required by the hon. Gentleman, I hope that outside bodies will realise that parliamentary proceedings must remain the first call on hon. Members' time.

Dr. Liam Fox: On a point of order, Madam Speaker. It is almost becoming tedious to have raise such points of order with you, but this one relates to the statement by the Secretary of State for Scotland on public expenditure in Scotland which he delivered at 4.30 pm today in the Scottish Grand Committee. The statement was made available to hon. Members in the Vote Office at 4.31 pm, but, by that time, I had already conducted an interview on the subject at Millbank, having been given the full figures by journalists. I checked the fax time of their information—it was 3.55 pm. Despite your constant admonitions, Madam Speaker, the Government are choosing either to ignore or to defy your wishes on behalf of the House. It seems that the Government simply wish that the House of Commons did not exist.

Madam Speaker: I share the irritation of the hon. Gentleman and other hon. Members. I have deprecated such occurrences before and I do so again most strongly. I see that the Scottish Grand Committee met at 4.30 pm today to consider a ministerial statement on the Scottish


local government settlement and what the hon. Gentleman says indicates that that statement was available well in advance to the media. What is happening is that the status of this House is being devalued, which I deprecate most strongly. I hope that senior Ministers present here will note my remarks and ensure that there is no recurrence of such events. It seems that I have to make statements such as this every two weeks.

Mr. John Smith: On a point of order, Madam Speaker. Is it in order that Members of Parliament are impeded in carrying out their parliamentary duties by the outrageous behaviour of a public transport company? I had to travel to Gravesend this morning to meet the flagship of the standing NATO fleet and had allowed plenty of time to allow for the usual delays and breakdowns. The train stopped at Crayford, where all the passengers were forced to get off, apparently for no other reason than that the train was running late. Had it not been for the quick thinking and co-operation of some of the passengers, I would not have got to my engagement. If you can assist in any way, Madam Speaker, it would benefit not only many hon. Members, but many commuters.

Madam Speaker: I have a good deal of authority from time to time, but it extends only within the House and not to the railways. However, I refer the hon. Gentleman to the Central Rail Users Consultative Committee, Clements house, 14–18 Gresham street, London. That body deals with issues affecting rail users and has the legal right to make recommendations for improvement.

Mr. Simon Burns: On a point of order, Madam Speaker. With respect to your authority, which you have just mentioned, I was wondering whether you could help me with a problem I face. I fully accept

that you have no responsibility for or control over the contents of answers to written questions, but that is not the thrust of my point of order. All Ministers, when they sign written answers to Members of Parliament, have in the jacket of those questions a guidance note from the permanent secretary of their Department stating that the answer should be factually correct and as helpful as possible in answering the question.
Yesterday, I had a written answer from the Department of Social Security to two questions that were grouped with a question from another hon. Member. One of my questions specifically asked the Department to publish the minutes of a meeting that the Secretary of State for Social Security had with an official from Wisconsin on compulsion for lone parents seeking work and welfare to work. The general answer to all three questions in no way answered that question. The Table Office tells me that, under the rules of the House, I cannot for three months retable that question to elicit the answer that I sought.
I now know, from a telephone call that I have made to the Department, the answer to my question, but it is not in the written answer that appears in the Official Report because the Government do not want to put in black and white in the public domain their refusal to issue those minutes. I do not question their decision, but they have not answered my question, so it has not been published in the Official Report. That is an abuse of the procedure whereby questions are tabled in order to elicit answers from Ministers and to question the Executive.

Madam Speaker: The hon. Gentleman rightly said when he began his point of order that I have no responsibility for Ministers' answers and comments. The hon. Gentleman did not give me notice of his question and I have not seen the question and written answer, but I should like to look at them. However, I am sure that what he has said has been noted this afternoon.

Electro-convulsive Therapy (Restrictions on Use)

Mr. John Gunnell: I beg to move,
That leave be given to bring in a Bill to amend the Mental Health Act 1983 to prescribe the circumstances in which electro-convulsive therapy may be used without the patient's consent; to establish who may administer it; to lay down requirements governing the apparatus with which it is administered; and for related purposes.
Electro-convulsive therapy is usually carried out under anaesthetic. The patient is strapped down and an electric current is passed through the brain, causing a convulsion. In 1990–91, the last year for which figures are available, 105,466 treatments were administered to an estimated 20,000 patients.
ECT is given to patients suffering severe depressive illness. The increased effectiveness of anti-depressant drugs has resulted in a reduced use of ECT, but its present level of use is not known because the previous Government stopped collecting data centrally.
In January this year, the Royal College of Psychiatrists completed its as yet unpublished third audit of ECT clinics in England and Wales. It revealed that 45 per cent. of junior doctors
lack knowledge about one or more basic issue related to effective administration of ECT.
The audit's authors say that for
maximum efficacy and minimal side-effects
those administering ECT should fully understand such issues and have
access to, and training in the use of, appropriate equipment."
Although all mental services now have a named consultant psychiatrist responsible for the ECT clinic, routine ECT treatment will usually be given by junior doctors. According to a Royal College of Psychiatrists press release, the third audit found that a majority of ECT machines met what was the then college standard, but in August this year one of the audit's co-authors told me that a more recently completed survey had revealed that 53 per cent. of ECT machines were obsolete.
In other words, in our hospital system, ECT treatment may be carried out with or without the patient's consent on equipment that is out of date and is administered by doctors who often do not have adequate training.
I submit that if that had happened in any other field of medicine, public opinion would have focused on it and found it wholly unacceptable. ECT continues, however, without any legal mechanism for improving the circumstances in which it is prescribed and carried out—perhaps because of the stigma attached to the mentally ill.
Data on ECT may be collected, but they are not held centrally. Inquiries to a specific trust or unit may be answered, but it is impossible to get a sense of the national picture. My Bill would establish a legal obligation on all hospitals to supply the Department of Health with detailed information on every patient in receipt of ECT and on the Department to publish an annual record, broken down according to gender, age and race, with an assessment of outcome.
The Royal College of Psychiatrists "ECT Handbook" publishes a suggested treatment record form for clinics to use. It includes space for an assessment of outcome to be

completed by both the patient and the responsible medical officer. My Bill would make the reporting, collating and central publication of such information compulsory.
There is a need for a change in practice. The Royal College of Psychiatrists, following its audits during the past 17 years, has given some clinics a yellow card—even a repeated yellow card—but there is no statutory means of giving a red card. Without that sanction, how effective can a warning be?
Should ECT be used at all? Some may have reservations about my Bill because it does not ban ECT, as has been done in some countries, such as Germany and Holland. It is commonly accepted in Britain today that, where possible, medicine should be evidence based. Enough examples are reported of patients who believe that their lives have been irreparably damaged by ECT. I have received a number of such letters and reports, and they are harrowing.
Such evidence is, of course, anecdotal, but there are enough anecdotes at least to raise serious questions. The wording of the Mental Health Act 1983 suggests that ECT would not be legal at all under emergency procedures if the changes to the patient it brings about are found to be irreversible. Some hard evidence is required.
For its part, the Royal College of Psychiatrists claims "rock solid" evidence that ECT works. It also argues that claims of side effects such as memory loss are attributable to the patient's depressive disorder. I note that the Royal College of Psychiatrists cites as the "best evidence to date" of ECT's success in treating severe depressive illness a 15-year-old piece of research it conceives can be criticised. With proper data collection and measurement of individual outcomes, my Bill would help to ascertain ECT's effectiveness and whether its effects are reversible.
My Bill proposes some limitation on the relative ease with which ECT can be given. At present, if a patient consents, ECT can be given without the agreement of a second opinion appointed doctor. The consent principle in the Mental Health Act 1983 can also be overridden by detaining the patient and treating them under the patient's best interest principle. While a risk of suicide, self harm or danger to others understandably requires the putting to one side of the consent principle, it is disturbing that that can occur simply because it is thought that the patient's health may improve if they are given ECT.
At the time of the debate on what became the Mental Health Act 1983, the right hon. and learned Member for Rushcliffe (Mr. Clarke), then the Secretary of State for Health, said that he had decided not to include ECT under treatments requiring both consent and a second opinion
but as experience is acquired, and if opinion changes, we shall be able to move it into the more serious …category."—[Official Report, 18 October 1982; Vol. 29, c. 86.]
My Bill would take us to the situation that the right hon. and learned Gentleman envisaged might be necessary. It would also ensure that ECT is carried out in safe circumstances and that the patient can be given ECT only if he or she has given informed consent and if a second opinion appointed doctor agrees, unless urgent treatment is judged necessary by the responsible medical officer.
Question put and agreed to.
Bill ordered to be brought in by Mr. John Gunnell, Mr. David Hinchliffe, Mr. Andrew Rowe, Audrey Wise, Mr. Paul Burstow, Mr. Peter Bradley, Mr. John Austin, Miss Melanie Johnson, Mr. John McAllion, Mr. Gordon Marsden, Mr. Ken Purchase and Mr. Neil Gerrard.

ELECTRO-CONVULSIVE THERAPY (RESTRICTIONS ON USE)

Mr. John Gunnell accordingly presented a Bill to amend the Mental Health Act 1983 to prescribe the circumstances in which electro-convulsive therapy may be used without the patient's consent; to establish who may administer it; to lay down requirements governing the apparatus with which it is administered; and for related purposes: And the same was read the First time; and ordered to be read a Second time on Friday 30 January, and to be printed [Bill 94].

Orders of the Day — European Communities (Amendment) Bill

Considered in Committee [Progress, 2 December]

[SIR ALAN HASELHURST in the Chair]

Clause 1

MEANING OF "THE TREATIES" AND "THE COMMUNITY TREATIES"

Amendment proposed [2 December]: No. 3, in page 1, line 13, after '2', to insert '(except paragraph 19)'.— [Mr. Howard.]

Question again proposed, That the amendment be made

The Chairman of Ways and Means (Sir Alan Haselhurst): I remind the Committee that with this we are taking the following:Amendment No. 4, in page 1, line 13, after '9', insert
'(except Article 2 paragraph 22)'.
Amendment No. 59, in page 1, line 13, at end insert 'except Article 2(3)(c)'.
Amendment No. 34, in page 1, line 13, at end insert
'other than in Article 2, paragraph 19)'
Amendment No. 36, in page 1, line 13, at end insert
'other than in Article 2, paragraph 22)'
New clause 21—Appointments to Employment Committee—
'.—Pursuant to Article 2 of the Treaty of Amsterdam, Paragraph 19 (Cmd. 3780, page 31), Her Majesty's Government shall make appointments to the Employment Committee in consultation with employers' and workers' organisations.'.
New clause 27—Social Chapter: Report to Parliament—
'.—Her Majesty's Government shall make a half—yearly report to Parliament on the implementation of Article 2, paragraph 22 of the Treaty setting out the United Kingdom legislation and employment implications arising from the new Employment Chapter and Social Chapter as agreed in the Amsterdam Treaty which shall be subject to resolution by each House of Parliament.'.

Mr. Mike Gapes: When we were discussing the Bill yesterday, I was trying to explain to the Committee and to Conservative Members my view that the proposals in the social chapter were an important contribution to the success of building harmony and a social partnership between employers and employees throughout the European Union. Today, I start by emphasising the fact that there are in this country many companies that were already implementing the provisions of the European directive concerning works councils before our Government signed up to the social chapter.
The European directive on works councils covers undertakings or groups of undertakings with at least 1,000 employees in 14 European Union states and the three European Economic Area states and at least one establishment employing a minimum of 150 workers in two of those member states. It therefore applies in 17 countries to multinational companies with their headquarters in the


United Kingdom, or anywhere else in the world, which operate on that basis. Although employees in the United Kingdom or any other country outside the European Economic Area do not count towards the 1,000 and 150 thresholds, they were considered within the overall picture if the companies that employed them were based in the requisite number of European Union states.
The Library has produced an interesting research paper, which includes the following statement:
It is estimated that, regardless of whether we are in or out of the Social Chapter, 113 UK-based companies will have to set up European Works Councils or other procedures under the Directive because of the number of their employees in other
European Community or European Economic Area
Member States. It is likely that most of these companies will choose not to exclude their UK workforce from any arrangements they make. Some 57
European works council
agreements have already been reached in UK companies and all include UK employees. All but 6 are in companies covered by the Directive.
A publication called "Bargaining Report", issue No. 167, published in December 1996, on European works councils, gives a helpful list of those 57 agreements. I shall not quote the entire list, but it starts with Albert Fisher group, Allied Domecq and APV and continues through British Airways, British Steel, British Telecom and Coats Viyella to Hanson Brick and Hanson Electrical—which is interesting, given the association of the latter two with a member of the other place—Imperial Chemical Industries, Imperial Tobacco, Laporte, Lloyd's Register and Marks and Spencer. The list continues through Reckitt and Colman, Reuters, Scottish and Newcastle and Securicor and ends with United Biscuits and Zeneca.
That interesting list shows that these matters were already influencing the situation in this country. Listening to Conservative Members yesterday, one would have thought that what was being proposed if we signed up to the social chapter was a terrible device that would destroy British business and cause great damage, and that British business strongly opposed it. In fact, those UK-based or British-based companies were already implementing the provisions outlined in the social chapter.

Mr. Giles Radice: Does my hon. Friend consider that one of the problems with the Conservatives' approach is that so few Conservative Members have read the social chapter? I remember reading it during the Maastricht debate and the same was true then. I saw the astonishment on Conservative Members' faces because they had not understood how little was contained in the social chapter, how much was excluded, the way in which it protected small firms and the fact that it had to take account of economic conditions. That is the problem: Conservative Members have not read the social chapter.

Mr. Gapes: I am grateful to my hon. Friend for that comment because, as on so many other connected matters, he is right. He has read the social chapter and all the other matters that we are debating in the Committee.

Mr. William Cash: rose—

Mr. John Bercow: rose—

Mr.Gapes: I give way to the hon. Member for stone (Mr. Cash)

Mr. Cash: Does the hon. Gentleman accept that the problem is not the large multinational companies but the small and medium businesses? Does he accept that, if one were to draw an analogy with the United States, the key question is whether we have enough flexibility in our labour market to enable us to generate jobs of the type that are being produced in the United States and that he is misrepresenting the position? I have indeed read the social chapter.

Mr. Gapes: I am surprised that the hon. Gentleman says that he has read the social chapter. I suggest that he reads it again because anyone who has read it and the directive knows that small companies are specifically excluded. Conservative Europhobes have an amazing misunderstanding of, or deliberately misrepresent, the situation. Their stance would be greeted with hysteria among Conservative and Christian Democrat parties in all other member states of the European Union

Mr. Desmond Swayne: Is the hon. Gentleman aware that one of the fundamental problems that businesses in Germany have is the incentive to remain small—at 10 employees or fewer—precisely because of the threshold in social legislation? That is exactly the threshold the virtue of which the hon. Gentleman now extols. The consequences are dire.

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Mr. Gapes: I am sorry, but I fail to understand the relevance of that intervention to the social chapter. I presume that it relates to internal German domestic law—if the hon. Gentleman is right. I am not sure whether he is; it certainly has nothing to do with the European Union or the social chapter.

Mr. Bercow: I have listened to the hon. Gentleman's strictures on the social chapter with the greatest possible interest. What does he say about Commissioner Flynn's proposal that works councils should be established in companies with 50 employees or more? Is he opposed to it? If so, is there the slightest prospect of the Government doing something about it?

Mr. Gapes: Had this country not signed up to the social chapter, the Government could have done nothing about it. The only way this country can influence the outcome of discussions and negotiations on these matters is by being at the table—rather than opting out.
Various proposals have been suggested in a number of areas, but they have not yet come to fruition and negotiations continue. It is therefore premature and unrealistic to say that such proposals have been agreed. Indeed, only two matters are currently included in the social chapter and they relate to works councils and parental leave, which we discussed earlier. New provisions in other areas are under consideration, one of which relates to burden of proof in sex


discrimination cases. As a result of the Amsterdam agreement, the Government will now have a voice in the negotiations on the final wording of that proposal.
Other proposals concern part-time workers. The Confederation of British Industry said that there should be an agreement on that. An agreement has been made among the social partners, who believe that high regard should be paid to how employers consider the rights of part-time workers. I hope that progress will be made in the not-too-distant future.
All good employers want to consult, inform and involve their employees. They regard committed, dedicated and loyal employees as vital to the success of their business. The best way to achieve that is to pay people well, show them respect and listen to them when they have views to express or grievances. Bad employers operate on the basis of driving down wages, not consulting, imposing, and acting in an autocratic and arbitrary manner. Unfortunately, if no social legislation is in place and there is no social protection or social partnership, bad employers are more likely to exist, to succeed in the market and to undercut the rates paid by good employers. That is why it is important to have a national minimum wage and the social chapter.

Mr. Andrew Robathan: The hon. Gentleman will be surprised to learn how much I agree with him about good employers. Almost everyone in the House agrees that any good employer listens to his or her work force. When I was on the Employment Committee, it never ceased to amaze me how many big companies, some of which the hon. Gentleman has quoted in terms of their support for the Amsterdam treaty, did not carry out such policies.
Does the hon. Gentleman not realise, however, that it is the business of neither national Governments nor the European Union to determine how an employer relates to his employees? That way goes the stifling form of government that we had previously, with beer and sandwiches at No. 10.

Mr. Gapes: That was a most interesting intervention. There is clearly a deep philosophical division between those who believe that Governments have no role in setting minimum standards and those who follow that logic and believe that everything should simply be left to the markets.

Mr. Robathan: I do not believe that.

Mr. Gapes: If everything should not be left to the market, I presume that there must be minimum standards and regulations to prevent exploitation and injustice, just as was proposed by a former Prime Minister and Conservative leader when he was responsible for wages councils in th early years of this century.

Mr. Bercow: Churchill?

Mr. Gapes: Yes. I refer to the right hon. Member who, having started off in Dundee and Oldham, finished his parliamentary career in the borough I am also pleased

partly to represent—Wanstead and Woodford. As far as I know, he has not yet been expelled from the modern Conservative party.

Mr. Bercow: rose—

Mr. Gapes: The hon. Gentleman seems to be a little agitated. Does he wish to intervene?

Mr. Bercow: I should love to. We all appreciate the hon. Gentleman's genial spirit, but he is meandering somewhat. I shall rescue him with an alternative challenge. Does he think that the American model or the European model is a better route to the creation of jobs?

Mr. Gapes: I was fortunate enough to come across some interesting statistics that show that unemployment in certain European countries is falling faster than it is in the United States. Among those countries are Sweden and Germany. That clearly shows that the model the hon. Gentleman wishes to pursue—the American model—lock, stock and barrel, which has no social protection or legislation to help protect the poor, the disabled and those with other problems, is at variance with the European model, which I prefer.
If we had to choose—we do not because we are part of the process of developing a model—I would rather start with a model based on social partnership than one based on the avaricious grinding down of poor people and exploitation. The hon. Gentleman obviously prefers the other model. That is the philosophical difference between modern, hard-faced conservatism and the Labour party's one-nation approach.

Mr. Bercow: The hon. Gentleman should know by now that I am a soft-centred individual. If he is not aware of that yet, he will be in the future. May I ask a simple factual question? Does he accept that, between 1974 and 1994, 31 million new jobs were created in the private sector in the United States and that precisely none were created in the European Union?

Mr. Gapes: Those are interesting statistics. I shall check the facts when I have read the transcript of that interesting intervention. Even if they were true, which I doubt, they would be irrelevant to the argument about the social chapter, which is a recent innovation in the EU. The figures that the hon. Gentleman quotes from the early 1970s are neither here nor there. We must deal with the situation in the 1990s.

Mr. Oliver Letwin: The hon. Gentleman is providing the dual benefit of entertaining the House and being patient with it. Does he realise that almost every provision to be introduced under the social chapter—one of which, incidentally, the hon. Gentleman referred to as a proposal, but is a directive that was debated by European Standing Committee B this morning—is already implemented in one form or another in most of the European states which have, as my hon. Friend the Member for Buckingham (Mr. Bercow) pointed out, produced zero employment gain over the period in which the United States has produced some 30 million jobs?
Is not the hon. Gentleman saying in effect—it is a perfectly reputable position, but it is important to bring it out—that he prefers to protect workers who are already


in jobs and, if necessary, to leave many tens of millions of ordinary people out of jobs for the sake of protecting those in work?

Mr. Gapes: If it were true that those were simply matters for other European states, I would be extremely concerned. Measures can be taken by national Governments to deal with the problem, as our Government are dealing with the legacy of the past 18 years by creating the welfare to work programme and by co-ordinated activity between the member states of the European Union, which is why the employment chapter was put into the Amsterdam treaty.
There is a combination of co-operation and action at a European level and the more important national component of action to reduce unemployment. The two must go together, because we are in a single market. There must be certain minimum standards within that market. That is why the concept of the social chapter, bringing together the social partners, developed concomitant with the establishment of the single market. It is not a case of one or the other. The two go together, side by side.
I agree with the criticism that some countries have had serious increases in unemployment. Germany certainly has serious problems, some of which are undoubtedly related to the unexpectedly high costs of German unification. I remember discussing what would happen with Members of the German Parliament in 1989, 1990 and 1991. Within four or five years, they said, east Germany will be fine and everything will be great. They did not expect the massive costs of the transfer from the west to the east and the impact that that would have on their economy.
Rising unemployment in Germany is clearly related to unification, but there are other factors. We could discuss them, but I do not want to delay the House much longer and other hon. Members want to speak.

.Mr. Bercow: The hon. Gentleman is filibustering his own Bill.

Mr. Gapes: If the hon. Gentleman wants to intervene, I am happy to give way to him. Otherwise, I should be grateful if he did not make contributions from a sedentary position.

Mr. Graham Brady: I am grateful to the hon. Gentleman for giving way. Does he believe that, when and if Europe has a single currency, there may be similar effects on unemployment in some parts of Europe as there were following German unification? What parallels would he draw between the two?

Mr. Gapes: There are no direct parallels. The argument about a single currency is for the debate on a different amendment. I would prefer not to go down that road now. I should be happy to read out the document produced by my right hon. Friend the Chancellor of the Exchequer if the hon. Gentleman so wishes, but that is a matter for a later debate.

Mr. Robathan: Why does the hon. Gentleman think that, this time, the Germans will be right about a single

currency whereas they were wrong in 1989, 1990 and 1991? Could they not be wrong twice in a row? Have they only ever been wrong once in their lives, and does he take them at face value?

Mr. Gapes: We can discuss that matter in the context of a later amendment.
The Government have carried out the mandate that they got from the British electorate on 1 May, which was to join the social chapter. The Conservatives were against joining, and fought the election with a strong claim that joining the social chapter would be a disaster, yet they were resoundingly defeated. Consequently, one would expect them to display some humility and accept the fact that they lost, but we still hear the same arguments as we heard before.
Not all Conservatives take that view, however. The Conservative MEP Tom Spencer—

Mr. Radice: Good man. [Interruption.]

Mr. Gapes: The reaction from the Conservative Benches is somewhat different. Tom Spencer called the treaty
a useful consolidation and clarification of the existing treaties and it should be accepted by both government and opposition in Westminster.

Mr. Swayne: Oh, that's all right, then.

Mr. Gapes: That was easy. I have more quotations, if other hon. Gentlemen want to intervene. Anthony Teasdale, MEP, was the special adviser to the right hon. and learned Member for Rushcliffe (Mr. Clarke) when he was at the Treasury before the election. Mr. Teasdale wrote a pamphlet with another Conservative MEP, Mr. Brendan Donnelly. The pamphlet, entitled "What's Right with the Amsterdam Treaty", was published only in October, so perhaps hon. Gentlemen have not yet had a chance to rush out and buy a copy.
The two MEPs reject the argument that the Conservative party should oppose the Amsterdam treaty because it includes the social chapter. They state:
Whatever the merits and demerits of such a move, everyone understood that it would follow if Labour were elected, Amsterdam Treaty or no Amsterdam Treaty. It is therefore perverse for critics to attack the treaty for incorporating the Social Chapter, and any criticism of this kind is likely to cut little ice with an electorate which accepted the legitimacy of UK accession by its vote on the general election of 1 May.

Mr. Swayne: I entirely accept that, but does the hon. Gentleman accept that new clause 27 acknowledges that Labour mandate? It merely puts in place a means by which the House might monitor the implementation of the social chapter.

Mr. Gapes: In which case, why is the hon. Gentleman arguing for the removal of the social chapter from the Bill? I fail to understand his argument: he wants the social chapter to be removed and to be kept in. I am a little surprised.

Mr. Radice: Perhaps the hon. Member for New Forest, West (Mr. Swayne) did not listen to the speech of the


right hon. and learned Member for Folkestone and Hythe (Mr. Howard), who made clear his total opposition to the social chapter when he moved the amendment.

Mr. Gapes: I am grateful to my hon. Friend.
In conclusion, I hope that, in a few months' time, when they have given further thought to these matters, wiser heads in the Conservative party will recognise that it is not in the interests of their party or of the country for them to keep their heads in the sand and to fail to face up to reality.
The modern world requires that Britain plays a full part in the European Union, negotiating in our national interests to obtain the best deal for our country. That is what my right hon. Friends have secured through the Amsterdam treaty and their decision to sign the social chapter.

Mr. Robert Walter: On Second Reading, I made clear my opposition to the Bill for three very good reasons. One reason might be described as purely tactical: I object to the Government's failure to use the unanimity required in treaty negotiations to secure a solution to the problem of fishing quotas and the working time directive—although I suppose that the latter cause would not gain much sympathy on the other side of the Chamber.
I also oppose the Bill most sincerely because I think that it is a very mean treaty which does little to adjust our institutions to a Union of 20 or more members. The treaty barely addresses enlargement—that will require another intergovernmental conference and another treaty. Most particularly, I oppose the legislation because of the inclusion of the social chapter and the employment chapter. That is also why I shall support the amendment. Those chapters will not create a single new job in my constituency—in fact, the loss of competitiveness as a result of the measures may lead to job losses and to bankruptcies. The blame for that result will lie firmly with the Government and those provisions in the treaty. The Government's adherence—some might suggest that it is somewhat out of character—to a dogma that is both outdated and anti-competitive will cause many problems.
The hon. Member for North Durham (Mr. Radice) suggested that the social chapter contains few provisions. He even claimed that Conservative Members have not read the social chapter. I assure him that we have read the social chapter, together with some excellent research material about it.

Mr. Letwin: My hon. Friend may be understating the position. Does he agree that, in all probability, the hon. Member for Stone (Mr. Cash)—and perhaps also he himself—knows the social chapter by heart?

Mr. Walter: I shall not recite the social chapter to the Chamber this evening, although I shall allow other hon. Members to do so if they wish. At the time of the Amsterdam conference, that empty box—as the social chapter has been called—contained only two specific provisions on works councils and parental leave. My question is: for how long?
United Kingdom business practice does not follow the European social model. Our business practice is viewed on the continent as more competitive and a threat to

European businesses. When the Amsterdam treaty was signed, the works councils directive applied to firms with 1,000 or more employees. The Commission now proposes to reduce that number to just 50 employees. Conservative Members regard flexible labour markets as critical to the future competitiveness of British industry. We occasionally hear such thoughts echoed among Labour Members, but there is little in this measure that would lead to flexible labour markets continuing on their current basis in this country.
Unemployment in Britain today is significantly lower than in any of our major European competitors. The flexibility created in the labour market by the previous Government means more jobs and a wider range of jobs. In our flexible labour market, more people can find a way of working that suits them. Is it a coincidence that the United Kingdom, which has the most deregulated labour market in Europe, also has more people in work than any other major country in the European Union?
In the past 20 years, Europe has seen the consequences of inflexible labour markets. Britain's more flexible labour market has ensured that unemployment is below that in Germany. United Kingdom unemployment stands at 7.1 per cent. In Germany, unemployment is 9.9 per cent; in France and Italy, it is 12.5 per cent.

Mr. Radice: I shall test the hon. Gentleman on the social chapter. Has he read the last sentence in article 1 or the last sentence in article 2.2?

Mr. Walter: I have indeed, but I do not believe that either article mentions the unemployment rates in Germany, France, Italy or the United Kingdom—which is what I was referring to.
I believe that the best way to help the unemployed is to improve their chances of getting a job. It is no secret that Britain's competitive position in world markets, its attractiveness to foreign investment and its low cost base are due to low social costs. In fact, Britain's social costs are lower than those in most other competitor countries. Thanks to the policies of the previous Government, the United Kingdom has a much lower level of statutory non-wage costs than any of our major competitors. Our hourly labour costs in manufacturing are significantly lower than those in any other G7 country.
For every £100 that is spent on wages in the United Kingdom, an employer must add approximately an extra £15 in non-wage costs. In Germany, the employer must add an extra £31; in Spain, it is an extra £34; in France, an extra £41; and, in Italy, an extra £44. Nevertheless, when the cost of living is taken into account, real take-home pay for manufacturing workers in the United Kingdom is higher than in either France or Italy.
If the social chapter is an empty box, as has been claimed, will those non-wage costs creep into labour costs in the United Kingdom? The European social chapter is the means by which the European social model in labour practices will spread across the channel.

Mr. Radice: Has the hon. Gentleman read article 2.3 of the social chapter? He will see that there is a British veto if it is a question of
—social security and social protection of workers;
—protection of workers where their employment contract is terminated;


—representation and collective defence of the interests of workers and employers…
—conditions of employment for third-country nationals…
—financial contributions for promotion of employment".
The terrible fears to which the hon. Gentleman refers may never be realised. He simply has not read the social chapter.

Mr. Walter: With the greatest respect, I have read the social chapter. My fear is not that the British veto might not exist in such matters but that the Government would be perfectly prepared, in their enthusiasm, to allow those costs to spread across the channel. I have heard nothing in the debate so far to suggest that Labour Members would be anything but enthusiastic about that spread of European social practice.
I referred earlier to the works councils directive. At the time of Amsterdam, it applied to companies with 1,000 or more employees, but the Commission now proposes to reduce that to 50 employees. In Germany, that kind of structure applies to firms with just five employees in some cases. In larger German companies, up to half the seats on the supervisory board must be reserved for employee representatives. The hon. Member for North Durham frowns. I believe that those non-wage costs would creep into the social chapter and come hurtling across the channel.
In many of our continental partners, the heavy hand of the state is present in the labour market. In the Netherlands, an employer must apply to the employment service before he can dismiss an employee. In Belgium, planned overtime must be notified to the authorities in advance. One can go around Europe on a tour of anti-competitive labour practices, but perhaps the star prize should go to Sweden, which offers an aggregate 450 days paid leave to parents, following the birth of a child.
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1 do not suggest that any of those practices are currently in the social chapter, but the excellent research paper provided by the House of Commons Library, entitled "The Social Chapter"—this is proof that some of us on the Opposition Benches have read not only the social chapter and the treaty but some of the background material provided by the Library—lists current issues in European social policy: working time, maternity leave and pay, young workers, European works councils, parental leave, part-time and temporary workers, posted workers, transfers of undertakings, consultations with workers, redundancies and transfers, worker information and consultation, onus of proof, equal treatment, positive discrimination, sexual harassment and equal treatment in occupational social security. Then there is a delightful heading, "Further Reading".
In my constituency, just how many new jobs will be created from signing the social chapter? Or—if Ministers have done their research—how many jobs in my constituency will be destroyed as a result of the Government's plan for a statutory minimum wage, which is not even part of this debate but can only compound the problem?
I regard myself as a good European, but I have no problem whatever in opposing the social chapter and the employment chapter as being bad for Britain and bad for Europe.

Mr. David Heath: New clause 21 stands in my name and that of my hon. and learned Friend the Member for North-East Fife (Mr. Campbell). It is a very modest proposal, simply requiring the Government to do what they should do: consult employers and workers' organisations before making appointments to the Employment Committee. I know that the Government have regular consultations with employers' organisations, and I hope that they also have regular meetings with workers' organisations, so the new clause poses no practical difficulties.
I hope that it will not be misinterpreted when I say that we on the Liberal Democrat Benches are a little cynical about the Employment Committee and do not feel that there is a role for discussing employment opportunities and the creation of jobs with our European partners, because we believe that it is a proper matter for the European Union to discuss. However, the Employment Committee may prove to be—we shall have to wait and see—yet another talking shop that achieves very little. If that happens, it will be regrettable, but if it enables a proper dialogue to take place between the representatives of industry and commerce in this country and those in continental Europe, who may take a slightly different view about the best way to proceed towards job creation, that must be a good thing.
I was interested in the earlier discussion across the Chamber about the contrast between the Anglo-Saxon and continental models. When the Prime Minister and his colleagues spoke about these matters in the various Councils of the European Union, I thought that he suggested that the Government were for flexibility nowadays. I thought that they were for the Anglo-Saxon model of job creation, which is, perhaps, not as untamed as the American model. We have no problems in agreeing with that. We believe that the key elements for job creation are completing the single market, maintaining deregulation and flexibility in the labour market and reducing labour costs. Those should be promoted within the context of the European Union.
There is clearly a dichotomy of thought on these matters between the British position and that of some of our European neighbours. Indeed, it characterises what we do in this country, and the Anglo-Saxon tradition. I know that there are strictures in this place about using foreign languages, so I shall not use the term in the original, but it translates as "hard capitalism" or "savage liberalism". The concept of "savage liberalism" is obviously absurd; nevertheless, the term is used in France and elsewhere. It is important that we engage in the debate. If the Employment Committee can play a part in ensuring that the British point of view is very much to the fore in the debate, that seems to be a worthwhile objective.
I do not need to detain the Committee further. The new clause would simply ensure that the Government consulted before making appointments to the Employment Committee. Not all Governments have always consulted widely before making appointments to the Employment Committee. It is to our advantage to see that this measure is clearly stated in the Bill and is used as a precedent for other appointments that the Government may wish to


make.I hope that the Minister will be able to accept the new clause, or at least accept its spirit, and satisfy us that the Government's intentions on this matter are quite clear and that consultation will take place.

Mr. Brady: I apologise for having missed the beginning of the debate, and, if I may, I shall recount a small anecdote that relates to European matters. I was detained by a Standing Committee that was considering rather arcane matters of copyright law. That provides a perfect illustration of the dangers of allowing any further extension of qualified majority voting, given that, in the very important matter of preserving and protecting databases—an industry in which the UK has more than 50 per cent. of the European market, and which is far more important to the UK than to any of our partners—the British Government were forced to accept that the database would be protected for only 15 years, rather than 25 as we had first wished. I shall not linger on that. I just thought it an interesting illustration of the dangers of allowing control over our legislative processes to leave our shores.
I am particularly grateful to the hon. Member for Ilford, South (Mr. Gapes)—who has left his place after a splendid speech—because of the clear and frank way in which he set out his objectives and beliefs in higher social costs. It is a legitimate debate which we used to have with the Labour party when language was used in a more straightforward way, in the days when people always used to say what they believed rather than sometimes hiding behind slightly different permutations of language, which seems to be the current fashion.
This point might help the hon. Member for Somerton and Frome (Mr. Heath) to understand some of the rather puzzling differences between the sounds that emerge from the mouth of the Prime Minister and what the Government are doing when they negotiate on our behalf in Brussels. I fear that in European matters, as in matters of domestic interest, words do not always mean what they purport to mean. That is a subject to which I shall return.
The way in which the Government presented the treaty to the Committee—indeed, to the country—was a fascinating illustration of the way in which they seek to present themselves and sometimes present minor achievements in negotiations as great triumphs. They presented the treaty as a triumph for the role of the member state, and as a triumph for business. They held it out as an example of a great new understanding of the way in which markets work. Closer inspection of the treaty and of the Bill shows that none of those claims is true.
Article 127 of the treaty incorporates the goal of high employment levels across European Union countries. The Government would have us believe that they are seeking to provide a business-friendly, less regulated environment that will enable higher levels of employment to be achieved. It will be a new environment that provides flexibility and all the elements of the Anglo-Saxon model to which the hon. Member for Somerton and Frome referred.I fear that that is not strictly reflected in any accurate assessment of the treaty.
One hopes and expects that the Labour party and the other European members states will recognise and understand that the Anglo-Saxon model is more effective in generating employment and in providing an

environment in which business can succeed. The average rate of unemployment in the European Union is about 10.8 per cent., compared with 7 per cent. in the United Kingdom. Other European countries should see the wisdom of following the UK model.
The International Monetary Fund has criticised the lack of flexibility in other European member states and the sclerotic state of continental labour markets. It has called for comprehensive reform of policies and institutions affecting the labour markets in continental economies. On the other side of the equation, it has praised the United Kingdom for the policies that have been so successful in building our economy and our labour market, and have allowed businesses to succeed.
I must again refer to the use of words. The Government's practice is to use words cleverly—by that, I am not implying any great compliment—which sometimes misleads the public. That can be difficult for Opposition Members. The Government sometimes mean the opposite of what they seem to be saying. A clear example is what they say about the employment chapter and the social chapter.
At the same time as Europe is apparently calling for greater flexibility and is accepting that labour markets need flexibility, it is also saying that we need co-ordinated flexibility. That is an oxymoron: it suggests that the only way to achieve the free, open labour markets that businesses require is to have a central plan co-ordinated from Brussels that establishes a blueprint for business. It shows that the Government and many of our European partners have little understanding of the way in which markets and business work.

Mr. Vernon Coaker: Does the hon. Gentleman agree that we have not a central plan, but a co-ordinated strategy? We are not dictating to people, but working together to achieve common goals.

Mr. Brady: I thank the hon. Gentleman for his point. I fear that the treaty is open to different interpretations, given the way in which it has been drafted, and the Commission's view of its effect in practice. The public relations information that has been put out gives the impression of a co-ordinated strategy, but I do not believe that that is the truth of the treaty.
The treaty sets out a new area of EU expenditure. Article 129 deals with incentive measures. Although it does not implement a rigid blueprint that must be accepted by and imposed on all member states, it gives the Commission the power to direct those incentive payments towards the member states that do the bidding of the Commission or of the majority in the European Union. Because of the different employment practices in this country compared with those in much of the rest of Europe, there is a great danger that incentive payments will be directed elsewhere rather than to the more flexible and effective UK economy.
Article 130 establishes a new Employment Committee. That is another way of centralising, controlling and creating uniformity across the member states, and lies uneasily with the suggestion that there is a drive for greater flexibility in European labour markets. I believe that it is a blueprint for harmonisation of employment law. The hon. Member for Ilford, South hinted at that, and it


comes back to economic and monetary union. It is widely accepted that economic and monetary union will require fiscal harmonisation to avoid competitive tax rates. Similarly, many people in the European Union believe that lower social costs attached to business gives an unfair competitive advantage. They may give a competitive advantage. They certainly give British business a competitive advantage at the moment, which is one of the reasons why our unemployment rate is so much lower than that of many of our European partners.

Mr. Bercow: I entirely agree with my hon. Friend. Is he aware that the 1989 social charter, to the principles of which this country is now committed, refers to leave that must "progressively be harmonised"? Does he agree that that is not only consistent with what he is saying, but is in direct conflict with the point made by the hon. Member for Gedling (Mr. Coaker)?

Mr. Brady: I thank my hon. Friend for his contribution. With customary eloquence and clarity, he has put the point rather better than I did.
The approach to harmonisation that seems to have escaped Labour Members is clearly set out in the treaty. The Commission will produce guidelines, which will be agreed by qualified majority voting, so the British Government will have no right of veto. Those guidelines may be contrary to the practice of employment policy in this country. I understand that the guidelines will be approved in the next couple of weeks, or so the Social Affairs Commissioner expects. Member states will then be called on to establish national action plans. At that point, I might agree with the hon. Member for Gedling, because member states could be asked to produce national action plans. However, the treaty does something entirely different: it requires those action plans to come back to the centre.By qualified majority voting, the institutions may make recommendations to member states that could be contrary to the policy, practice or intentions of our elected Government.
It is slightly disingenuous to suggest that the treaty is a decentralising measure which gives greater freedom and flexibility. It does not. Article 127 states:
The Community shall contribute to a high level of employment by encouraging cooperation between Member States and by supporting and, if necessary, complementing their action.
That puts an obligation on member states to complement what other member states are doing. That is a very interesting treaty obligation. It does not suggest that the United Kingdom or any other member state could operate its own, independent, flexible labour market conditions. The treaty clearly intends to create a single entity in European labour policy, whereby member states should seek to improve not their own competitive position, but that of the European Union.
Some people may say that that is all very well—if we raise standards in the EU as a whole, that is a good thing. Of course it is, but I question, first, whether it is possible to raise standards in the EU as a whole by placing social costs on business throughout the EU and, secondly, whether it is in the UK's interests to sacrifice its more competitive social costs.
Buzz words appear throughout the employment sections and the rest of the treaty: employability, entrepreneurship, adaptability, equal opportunities and

flexibility. Most of us would happily agree with all those things, but, on Monday, I had the great advantage of joining members of the Select Committee on Education and Employment on a trip to Brussels to meet Mr. Flynn, the Social Affairs Commissioner. I had the opportunity to question him on what some of those words mean. Again, I heard a different interpretation of English language, which is the result of far more than the distance of the Irish sea. Indeed, some of my antecedents come from the same emerald isle.
I was filled with admiration for the way in which Mr. Flynn avoided my questions, but some remarkable things emerged. Talking about flexibility and adaptability, I put the question to him directly: does focusing our policy on flexibility and adaptability to improve employment conditions throughout Europe mean that we have seen the last of Europewide harmonisation, through directives such as the working time directive, which increased social costs throughout Europe? "No," said Mr. Flynn, so there is no question about that.
Then I pursued Mr. Flynn on the question of flexibility. "What does it mean?" I asked. He said, "We are talking not about flexibility"—I hope that the Committee will be grateful for the fact that I am resisting the temptation to impersonate him—"but about positive flexibility." I pursued him a little on the definition of positive flexibility. I only wish that, on a Wednesday, we had the opportunity to pursue the Prime Minister in the same open way, so that he actually gave answers and the details behind the policy, which sometimes give the game away, rather than just words, which sometimes obscure the meaning.
It emerged that positive flexibility can mean more, not less regulation. Notably, Mr. Flynn gave one example: under its new flexibility policy, the Commission would, as a matter of urgency, be pressing to remove the current exemptions from the working time directive. Therefore, particularly in relation to transport work, flexibility in the context of the Amsterdam treaty means increased employment costs and more restrictions on working hours. It also means bringing forward the directive on part-time work as a matter of urgency. Again, sometimes, the interpretation of the treaty by Ministers and by those far more senior people in the hierarchy—the Commissioners in Brussels—is different from that commonly understood from their use of words.
Employability is difficult to define, but I am not sure that I even understood the definition that the Commissioner gave. He said that, rather than use the word "employability", he would prefer to use the term "partnership gap". In that instance, I was completely floored. I cannot say what it meant: it did not appear to have any meaning whatever.
I return to the incentive payments and the way in which it is possible for the Commission and the European institutions to force member states into line in the interpretation of social and employment policy. It is important to note that, in the new round of structural fund expenditure, 10 per cent. of the funds—a lot of money—will be kept in a reserve fund. It seems that that will be spent in member states that perform according to the Commission's wishes: the Commission will spend money in member states that perform well according to the treaty standards in article 127.
Why will that money be reserved? Is it to reward countries that do something that is not in the guidelines set out by the Commission, but that—as with the UK—achieves better results than countries that do? Or is it to encourage—or support perhaps—countries that find that their economies are less effective and that have lower employment, precisely because they observe the terms of the Commission guidelines? It is clear that the Commission will not be rewarding countries that adopt a freer, more flexible approach.
The policy set out in the treaty will not lead us towards a more flexible employment model or to more job creation, on which the UK has an excellent record. I asked Mr. Flynn for an example of a country that best summed up his model of positive flexibility. I had in mind the UK, which has of course a much better unemployment record than most other member states, or even—this was perhaps a little hopeful—the United States, but he held out Denmark as the best example of flexibility to which we should all lean, a country which has extraordinarily high taxation and social costs attached to business.
That brings us back to the central point. What is being sold to the British public is not identifiable from the words that are attached to the treaty and from the way in which they are expressed. That is worrying. It is not a great example of democracy in action.
The only reason why there needs to be a co-ordinated employment policy throughout the European Union involves something that we may discuss later: European economic and monetary union. If EMU exists in parts of the continent of Europe and there are economic shocks that affect employment, a centrally directed mechanism will be needed to change policy and to alleviate some of the problems that EMU will cause.

Mr.Stephen Pound: I have been educated and informed this evening, but I confess to being a little confused on occasion. As the debate has veered between the philosophical and the specific, a theme seems to have emerged from the Conservative Benches: by definition, all regulatory provisions are anti-competitive and bad for business. That assertion is absolutely extraordinary and completely at odds with the proud history of the Conservative party, particularly in the 19th century, in which I am sure many Conservative Members wish they were living. The Conservative party has been proud to intervene. It has appreciated the fact that the free market has to be regulated in everyone's interests.
It may be because I am to leave shortly for a dinner at the CBI—[HoN. MEMBERS: "Ah."[I am sorry, but it comes with the turf with new Labour. I am not sure what CBI stands for, but inevitably I have had to do some preparation and I spent last night wrestling with Adam Smith. In "The Wealth of Nations", we find time and again that the apostle of the free market never intended that labour markets should be completely untrammeled—that markets should be completely free. The hidden hand of the market may be excellent in relation to consumer choice, but it is not the way to run a country in the interests of all its citizens.
The Government recognise that not only business but workers have a crucial role to play in the conduct of our economic affairs. Workers, too, have the right to have their voice heard.

Mr. Letwin: I wish to spare the Committee possible trial and tribulation. I take it that the hon. Gentleman intends to argue why the provisions should be included in the treaty and why there should be European legislation on the matter, rather than whether there should be national legislation on the matter as he appears to be doing.

Mr. Pound: The hon. Gentleman may be assured that eventually I will reach the very point to which he refers. I simply wanted to respond to what appeared to be, if I may be forgiven for saying so, almost inherent anti-Europeanism.

Mr. Cash: Does the hon. Gentleman recall that Adam Smith's great work was in fact "The Wealth of the Nations—"nations", not the European Union?

Mr. Pound: I thank the hon. Gentleman for that information, which I will add to the small store of knowledge that I have accrued in the short time I have been in the House. I was under the impression that the work was called "The Wealth of Nations", but I understand that Adam Smith originally wrote it in Scottish so it may possibly have lost something in translation when we first read it in Fulham.
7 pm
We have heard about things hurtling across the channel like V Is or doodlebugs. That to me is indicative of what I called the inherently anti-European emotions that we have heard from Conservative Members. Indeed, I feel that if someone offered some Conservative Members a Christmas pudding for nothing and it was revealed that it had been boiled in Brussels they would strike it from the hand of the donor, and should there be French brandy on the Christmas pudding it would be drop-kicked into the Thames without a second thought.

Mr. Brady: rose—

Mr. Pound: I give way to the expert on Christmas puddings.

Mr. Brady: It is bizarre that the hon. Gentleman accuses us of being anti-European when he raised the subject of Vls or doodlebugs.

Mr. Pound: To be aware of the history of our nation is not to be pro or anti-European but merely to be fairly well educated.

Mr. Bercow: I fear that the hon. Gentleman is working himself up into a lather of excitement before a good dinner. I am enjoying his speech, but I fear that he has started on an unfortunate note. He referred to the CBI. Does he acknowledge that the CBI is not Euro-sceptic, but is opposed to the social chapter and to the Government's policy in relation to that because it knows that the social chapter will damage the cause of British business and British employment?

Mr. Pound: I thank the hon. Gentleman for that intervention, but that is not my understanding of the


current position of the CBI. I am confident that after the port and cigars have been passed around tonight and we have had the opportunity to discuss the matter the CBI will be as much in favour of the social chapter as I am.
The two main subjects under discussion—the social chapter and the employment title—have been described as empty boxes. Various other metaphors—[Interruption.] I am sorry, Mr. Lord. I thought that I was being told to shut up. There were gesticulations from behind the Chair. As someone who is fairly new to the ways in which this place operates, I thought that it might mean that I was committing some social solecism.
The new provisions on social affairs and employment are not empty boxes but some of the most important provisions of the Amsterdam treaty. I cannot understand why Conservative Members do not appreciate how much those two specific aspects concern the people of Europe and Britain. It is not for me to speak for the Government, and it will doubtless never be my place to speak for the Government, but were I able so to do I would say that we welcomed those provisions whole-heartedly. By bringing the social chapter into the treaty, we have made it clear once and for all that British workers are worthy of the same rights and protection as their European brothers and sisters—and about time, too. I believe that Mr. Bercow is about to rise.

Mr. Bercow: Will the hon. Gentleman answer the question that the hon. Member for Ilford, South (Mr. Gapes) declined to answer? Does he believe that the American model is a better route to job creation than the European model, or does he believe that the European model is better? There must be an answer.

Mr. Pound: I apologise for referring to the hon. Member for Buckingham (Mr. Bercow) by his given name. I appreciate that that is not done, and I will not do it again. My hon. Friend the Member for Ilford, South (Mr. Gapes) is more than capable of speaking for himself. We have heard much about the Anglo-Saxon model, but our concern tonight—as a European country, which we are, and in Europe, where we are—should be with matters European. Whereas it might be interesting from an abstract point of debating style to compare our economy with that of the United States, that is not the business before the Committee.
For once, we are recognising that British workers are entitled to the same protection as their continental counterparts, but Conservative Members are telling us that if we adopt those basic rights—the litany of which was read out as though it were some invocation or mediaeval curse rather than a basic framework and structure of protective regulations—it will make us uncompetitive. We can bandy statistics all night, but my belief—and, I believe, that of Labour Members generally—is that that is simply not the case.
The flexibility that has been mentioned today is in many ways underpinned by security at work. If there is one thing that cuts to the heart of the issue, it is that insecurity at work, untrained staff and people without the necessary flexibility cannot service a modern economy.

The social chapter will itself underpin the strength of the British economy and the continuing reduction in unemployment.

Mr. Brady: I am most intrigued to know whether the hon. Gentleman is suggesting that measures regarding job security and tenure will be forthcoming under the social chapter. We hear so often that there are only two measures in the social chapter. Is he suggesting otherwise?

Mr. Pound: I was perhaps speaking in the abstract. It was said that in Holland, I believe, one has to notify an agency if one intends to dismiss a member of staff. That is completely incorrect: one simply has to notify the employment agency that a vacancy exists. Speaking as an individual, I should be perfectly happy for a provision offering tenure at work to be implemented, but that is not what we are debating.
What we have heard tonight might lead us to believe that a terrifying vista or horrifying European nightmare of regulation is, if not hurtling across the channel, at least oozing under the door of the Chamber. Yes, there have been times when some of our European partners believed that regulation per se was the answer to Europe's social and employment problems. That is no longer the case.
Nowadays, there is a different attitude in Europe, and we owe it to ourselves, our constituents and the House to be part of that new attitude in Europe, not to be constantly cavilling at the perimeters and making the accusation that by providing the basic rights contained in the employment title and the social chapter we shall lose what we have gained over the past few years.
By signing up to the social chapter we now have a voice in the wider debate on employment, social rights and competitiveness. The previous Government—doubtless for excellent reasons and nothing whatever to do with internecine warfare—denied themselves the opportunity to be involved in the discussion. Almost by definition, they adopted an isolated and extremist position

Mr. Letwin: Will the hon. Gentleman explain what he means by the interesting notion of our having the opportunity to take part in the discussion and having a voice? Will he relate it to what happened this morning in European Standing Committee B? The Committee considered three directives and was told specifically that the Government had failed to analyse them but felt that they had to sign up to them. What does the hon. Gentleman believe to be the characteristic of sitting at the table and having a voice if that voice is constantly contradicted by a large number of voices across the table?

Mr. Pound: I cannot comment on what the hon. Gentleman got up to before lunch today because I was not there and I have not seen the video, but the jobs summit provides a good example of our voice being heard. The Government's input and emphasis on promoting employability and adaptability was accepted by the rest of the people at the summit. With the greatest respect, I cannot see that that degree of agreement would have been reached by any previous Government. I freely confess to a complete lack of knowledge of what the hon. Gentleman mentioned, but if he would like to give me details of his movements before lunch I will be happy to discuss them later.
The UK Government insisted that the employment title recognise that the key to a high level of employment is
a skilled, trained and adaptable workforce and labour markets responsive to economic change".
That, too, has been copied by our partner nations in Europe. We are at the table and what we are saying is being listened to, respected and adopted by many of the other nations.

Mr. Tim Collins: The hon. Gentleman is making a strong case against the United Kingdom having an opt-opt on anything at any stage, because, he says, we should be present at the table and in a position to influence the debate. Why are the Government therefore so proud of the opt-out that the Prime Minister says that he secured—although it was secured by the previous Government—over border controls? Should we not be at the table on that matter, playing our happy part as part of the European family?

Mr. Pound: We have not exercised that opt-out in discussions on the employment title and the social chapter. I have a personal view on the Schengen situation that is shared by many hon. Members on both sides of the House. As a loyal supporter of the Government, however, it would not be appropriate for me to mention that view now. [HON. MEMBERS: "Oh?"]Conservative Members cannot split Labour Members on the issue with the ease and frequency with which they split themselves.

Mr. Letwin: I am most grateful to the hon. Gentleman for his patience in taking interventions, but I think that he has failed to realise the force of the question asked by my hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins). He asked not about the hon. Gentleman's views on Schengen but about the structure of his argument. So far, the hon. Gentleman has made an argument in favour of certain types of social legislation; the House understands that. Such legislation could be enacted domestically. The only argument that he has made so far in favour of incorporating such provisions in the treaty—and, more specifically, incorporating the treaty into English law—is that we should have a voice at the table. If that is a general principle, it should extend throughout the scope of European legislation. He must therefore—I hope—be about to present some other argument for incorporating into English law the provisions dealt with by this group of amendments and new clauses.

Mr. Pound: I should have hoped that it would be self-evident that in both this and the next century employment patterns are and will be multinational rather than merely national and that we have to view our employment and social legislative practices in the European context. I should have hoped that that was self-evident.

Mr. Letwin: I am tremendously grateful to the hon. Gentleman, and I assure him that I will not intervene again in his speech. In claiming that we have to take a European view, however, he has now hit the nub of the issue. Will he admit that we are part of a global

marketplace and that the real competitive threat faced by all Europe is a global threat, especially from the tiger economies?

Mr. Radice: Tiger economies?

Mr. Letwin: Yes, the tiger economies: notwithstanding their current difficulties, they will beat the British and the rest of the Europeans hands down if we cannot match their practices, practice for practice. Does the hon. Member for Ealing, North (Mr. Pound) agree that we are part of a global marketplace and not merely part of the European marketplace?

Mr. Pound: I should hope that all hon. Members realise that if global competitiveness has proved one point-especially in the part of the globe that the hon. Gentleman mentioned—it is the necessity of a strong trading and economic bloc, of which Europe is the exemplar. I do not wish to go into the entire debate on economic and monetary union, although I should be happy to do so if Conservative Members so wish, but it makes sense—if for no reason other than defensiveness—for us to be part of a strong united Europe. The day of the former tiger economies—currently the stuffed pussy-cat economies—may return, and their cause may re-emerge. That is all the more reason for us to be strong in Europe and not to be where the previous Government chose to be—on the periphery.

Several hon. Members: rose—

Mr. Pound: Mr. Lord, will you advise me on whether I am able to give way to three hon. Members at once?

The Second Deputy Chairman of Ways and Means (Mr. Michael Lord): The hon. Gentleman will have to decide on one hon. Member

Mr. Pound: What a pleasure it is to see the hon. Member for Aldridge-Brownhills (Mr. Shepherd).

Mr. Richard Shepherd: I realise that the hon. Gentleman believes in high employment levels and that he holds that as a valuable and important objective of the current Government. Can he not appreciate, however, the concern of the many Conservative Members who fear the institutional arrangements that we are debating? Conservative Members have no objection to social progress as the hon. Gentleman has outlined it—the Conservative party's history is one of social progress, such as "the widow's shilling", under Chamberlain—but what will the hon. Gentleman do when there is a genuine belief that the specific route or measure being proposed by the European Union conflicts with the objectives of the Labour Government in maintaining a high employment level? What will he do if he has to deal with a law that is superior to anything that he will be able to affect through the Labour Treasury Bench? That is the conflict and the resolution that we are trying to identify. My hon. Friend the Member for West Dorset (Mr. Letwin) has implied that we could enact the social provisions domestically, so that we are not ruled or governed in circumstances in which the judgment of elected Members of Parliament is in conflict with the views of the European Union.

Mr. Pound: I have strong admiration for the hon. Gentleman, who has been consistent in his views, which


have earned him great admiration both among hon. Members and from the public. In response to the points that he made, I would point out that we still have the veto. If we accept that the only way of achieving economic success is constantly to undercut working terms and conditions and to drive down wages, we do not need regulation or the social chapter—but that way madness lies. We must consider the health of the entire nation, not just the health of the employing section of the nation. My hon. Friend the Member for Ilford, South specifically dealt with the points made by the hon. Member for West Dorset (Mr. Letwin), with far more elegance and brevity than I could manage.

Mr. Bercow: I am richly enjoying the hon. Gentleman's speech, but he resembles nothing so much as a shifting goal post. Let us try to identify exactly where he stands. He regards himself as a good European. Does he therefore believe that holiday pay throughout the European Union should be harmonised under the provisions of the social chapter—yes or no?

Mr. Pound: There is much evidence to suggest that what those using the Anglo-Saxon model might regard as excessive holiday pay, particularly in Germany, is being harmonised from within Europe. Across Europe, such forms of harmonisation are the precise results of Maastricht. I believe that workers deserve a break. Perhaps holidays do go on too long in some parts of Europe, but I will not name any specific countries.
Before my soup gets cold—it may well already be cold as it is quite a fashionable dinner, I am told—I should like to make my final points. The new social and employment provisions provide an excellent basis for improving prosperity, tackling unemployment and tackling the issue that has been raised only peripherally in this debate: social exclusion. Across Europe, we must consider the issue of social exclusion. The social chapter goes a long way towards incorporating that concern and that philosophy into the heart of our Government's actions.
As hon. Members are well aware, the social chapter provides a mechanism for agreeing Europewide standards for minimum levels of fairness at work. What on earth is wrong with that? How can anyone carp and cavil at that basic demand? Do people oppose it only because it is pan-European? I should hope that anyone who cares for the people whom they represent would be a strong supporter of it.
The Government went to Amsterdam determined to put jobs at the head of the EU agenda and to bring the social chapter provisions into the treaty. As one of the humblest and most obscure Government Back Benchers, I am proud of what the Government achieved in Amsterdam. I am utterly convinced that the way forward in achieving an inclusive, economically successful, low-unemployment nation within the rest of Europe is precisely as delineated in the two issues that we are debating today.

Mr. Cash: After that robust knockabout by the hon. Member for Ealing, North (Mr. Pound), perhaps we should return to some of the more fundamental questions in examining the nature of the provisions. I have heard

much talk about relative hourly costs for production workers, and I thought that it might be useful to mention the most recent figures comparing costs in, for example, Germany, France, Italy and the United Kingdom. On a baseline figure of 100 for hourly labour costs in 1997, the figure for Germany is 145, for France it is 93, for Italy it is 92 and for the United Kingdom it is 80. That gives one a simple snapshot of the differentials between wage rates in other countries under the provisions of the social chapter and the kind of manoeuvring that is taking place with a view to trying to undercut the United Kingdom. Fundamentally, that is what the issue is mostly about.
Let no hon. Member imagine that the arrangements for the social chapter have been designed simply to enhance the benefits of those in other parts of Europe. There is an ulterior motive to ensure that higher labour costs are applied in the UK so as to raise our wage levels and put us—from the point of view of other European countries—on more of a level playing field. For the UK, the bottom line is that we have a substantial differential advantage at the moment, which is one of the reasons why we are doing relatively well.
The same argument applies to the minimum wage, to which the Government are committed. The figures for the Liverpool model, which I have been given by Professor Patrick Minford, suggest that the direct effect of the proposals
would be to raise the pay of low-paid men by 21.6 per cent. on average, and that of women by 25.6 per cent., an overall weighted average…of 24.1 per cent.
That would mean a substantial increase in costs to the UK.

Mr. Radice: Pay is excluded from the social chapter.

Mr. Cash: Yes, but the hon. Gentleman knows perfectly well that the Government are introducing proposals for a minimum wage. That is what I am dealing with. The hourly rate at which the Commission arrives has to be reflected by movements similar to those in respect of the code of conduct for what is described as "harmful tax competition", which is the new method whereby the Commission achieves a degree of harmonisation across the board—achieving in national legislation proposals which are commensurate with the kind of playing field that the Commission wants to create in Europe as a whole.
On the costs of the social chapter, Professor Minford points out that general gross domestic product would be depressed by a staggering 20 per cent., with consequences for unemployment that the model cannot effectively quantify, so far is it from even the worst United Kingdom experience. That is devastatingly bad news. If the Government want to challenge the Liverpool model and the arguments of Professor Minford, I have no doubt that he would be only too delighted to take them on. He says:
In the case of the weakest combination, the damage to output is estimated at 9 per cent. and unemployment increases by 3 million (10 per cent. of the labour force).
That is published information—[Interruption.] It is all very well for the hon. Member for North Durham (Mr. Radice) to laugh. As Chairman of the Treasury Committee, he may wish to ask Professor Minford to appear before the Committee and to examine such questions. That would be the responsible way of going about the matter, rather than proceeding on the basis of the advantages that claimed for the social chapter and the


arguments that go with it. I suggest that there should be a proper debate rather than the kind of banter that we heard during the speech of the hon. Member for Ealing, North.

Mr. Radice: I am sure that members of the Treasury Committee would be delighted if Professor Minford appeared before the Committee when we consider issues such as economic and monetary union. No doubt he would talk about the issues to which the hon. Gentleman has referred. Of course, models depend on what assumptions one feeds in: if one feeds in incorrect assumptions, one gets incorrect results.

Mr. Cash: I would say much the same of reports that have poured out of the European Commission such as the Cecchini report, "One Market One Money," and all the other junk that has been generated. They have effectively been written backwards because all the Commission ever wanted was to arrive at the conclusions from which it started. That is the worry. I would agree with the hon. Gentleman if he were prepared to conduct a completely objective analysis in the Treasury Committee. I suspect, however, that he has been appointed Chairman of that Committee precisely because the Government do not want an objective analysis. The hon. Gentleman is well known for coming from where he started, and I assure him that I know where he will end up.
I come now to questions on the impact that the process towards European economic and monetary integration has had on the British economy, the consequences of the exchange rate mechanism and the advantages that we have had since we came out, which I am sure that the hon. Member for North Durham would not want to dodge. I should like to believe that he could apply the same criteria to the advantages that we have had since we left the ERM to the advantages that we are enjoying while we are out of the social chapter.
I am well aware that relatively few provisions of the social chapter are as yet to be incorporated—it is a softly softly catchee monkey operation. Having served on the Select Committee on European Legislation for the past 14 years, I have seen stuff such as this as it has come forward in a series of proposals. There is masses of legislation in the pipeline. It is a fraud on this debate and on the people of this country to pretend that the issue gravitates only around questions relating to works councils and the like.
I turn to a comparison that we can genuinely make between economies elsewhere in Europe and economies at the present time both in the United Kingdom and—so far as a reasonable comparison can be made—in the United States. There is no doubt that outside the social chapter, with union legislation under Baroness Thatcher, changes have been made as a result of which we are truly competitive in the world.
Since 1974, unemployment in the European Community has increased. That is very significant. From 1974 to the present day, unemployment has risen from 2.5 per cent. to an average of about 11.5 per cent. The issue is not just one of adopting a chauvinistic or party political point of view on one side of the Committee or the other. In the national interest, it cannot be right for us to ignore the reality that unemployment in Europe has risen since 1974 by such an amount.
There is the most appalling youth unemployment in countries such as Spain, where it is running at about 35 per cent., Italy where it is 33 per cent., and France

where it is 28 per cent. It is monstrous that people should be subjected to such misery and deprivation as a result of policies that have been pursued in Europe over the past 20 years in the process of so-called ever closer union. As I said the other day, the process is in fact ever closer division.
The policies are causing deprivation, hardship and unemployment. I cannot for the life of me understand how, in a trivial exercise called the jobs summit last week, Labour Members could possibly imagine that they would be able to claw back the dangers to the people of this country—including their own constituents—that what I have just described represents. Believe me, it will come to haunt them.
As has been mentioned, 31 million jobs have been created over the past 20 years in the United States compared with zero in Europe. Do not Labour Members realise that there must be a lesson to be learnt from that? Why are they involved in the Gadarene rush towards creating massive unemployment and greater difficulty for the people of this country? I shall give way to my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis)—or at least I think that I am about to. I thought that he was rising and wanted to say something.

Mr. David Davis: My hon. Friend has provoked me to speak rather than my asking him to give way. I apologise to him for intervening in the middle of his speech. If the social chapter is so minor and unimportant, as Labour Members claim, why was our joining the social chapter raised at the top of the agenda at every Council of Ministers that I attended? The continental countries were clear about wanting us to join so that more could be added to it without further disadvantaging them.

Mr. Cash: My right hon. Friend, with his immense experience, makes a telling point. The real reason why the other countries have been so anxious to impose the social chapter on us is that they want to ensure that the United Kingdom does not get a competitive advantage in the ever-increasing legal area of employment. I should not really say this, but in a funny way it is quite a good ruse from their point of view, if they get away with it. Unfortunately, not only are the Government prepared to run with that ruse, but they are prepared to advocate it. They want to destroy jobs in the United Kingdom.
That is what is going on in the coal industry. In my Adjournment debate the other day, I pointed out that the German coal producers are getting as much as £5 billion a year. State aid is tied up with the social chapter and employment policy. Why are the so-called new Labour Government anxious to drive out good, honest, hard-working miners in my constituency and elsewhere in the United Kingdom on the altar of the ideology of the European Coal and Steel Community—which stinks—giving the Germans the opportunity to pay their miners £5 billion a year? What are the Government doing about that? That is social policy. That is where they are destroying United Kingdom jobs and creating advantages for people elsewhere.
I have always supported the notion of a single market, but I do not support gross differentials, gross unfairness and a complete lack of competition. That is the problem.


That is why I am so concerned about the behaviour of a Labour Government that got in on the basis of a vast mistake that was made over the exchange rate mechanism. We broke promises on that, tied up with monetary union and other issues. Perhaps the British people had not quite connected that with domestic issues. A Labour Government ride into that vacuum and go around destroying jobs, such as the 5,000 that they are about to ditch in the coal industry, although I heard the Prime Minister attempting desperately to hang on to the cliff edge by making some promises this afternoon. We know that his commitment to a 20 per cent. cut in emissions is at the root of the problem and the Labour party's embarrassment.
The social chapter is about employment policy and the manner in which we create jobs.By signing up to it, we shall take away the advantages that have been built up by the Conservatives over the past 18 years. I find that very depressing. I hope that the people of this country will take note of the arguments of Conservative Members, although I am experienced enough in this place to know that the best way to keep a secret is to make a speech in the House of Commons.
The European Commission's figures on the effects of the social chapter show that regulation has shackled employers. Greater flexibility to respond to market conditions is essential if jobs are to be created. According to the European Commission, non-wage labour costs add an average of 30 per cent. to employment costs in the European Community. The figure approaches 50 per cent. in Germany, France, Italy and Belgium, but it is only 19 per cent. in the United Kingdom, where health care and much of welfare spending is paid for by general taxation. Many other member states are searching for alternatives to high payroll taxes because of the damage that they inflict on employment opportunities and are looking for ways to put the costs of social benefits on the general taxation budget.
The provisions of the social chapter and the employment title are nothing more than pieces of paper that will cause incredible damage to people in my constituency and throughout the United Kingdom. I trust and believe that they will cause a great deal of embarrassment to the Government, who are inviting the chaos, the disorder and the implosion of the European Community that the measures will cause.

Mr.Bill Rammell: I am happy to follow the hon. Member for Stone (Mr. Cash). I do so with some astonishment, because—I think that I understood his argument—he said at the beginning of his speech that the social chapter was a deliberate, organised attempt by other European countries to bring our social costs up to European levels. I remind him that we had an opt-out. It is not the other European countries that are arguing for the abolition of that opt-out; it is the British Government. That is an example of the xenophobic rhetoric that I referred to earlier in Committee.
I am looking particularly at the hon. Member for Buckingham (Mr. Bercow) because yesterday, when I could not be here, he said that I did not justify my claims about xenophobic rhetoric. I am happy to do so by referring to the language and policies of the Conservatives. Last week, the hon. Member for North

Essex (Mr. Jenkin) imagined a housewife in Surrey being disconnected from the political process because Members of the European Parliament speak in a foreign language

Mr. Cash: I must intervene. The hon. Gentleman cannot be allowed to get away with that. I will not be accused of being xenophobic. The hon. Gentleman must answer a simple question. Does he think that it is xenophobic to produce statistics based on the European Commission's analysis of wage rate differentials? If he does, he is clearly mad.

Mr. Rammell: I shall not respond to that directly. I do not think that it is wrong to quote European Commission statistics. That is not the issue on which I was accusing the hon. Gentleman of using xenophobic rhetoric. However, he said—I am paraphrasing him—that the social chapter was an organised conspiracy by other European Governments to bring our social costs up to their levels. The proposal to abolish our opt-out does not come from Europe; it comes from Labour.

Mr. Radice: I know that it is boring to hear the social chapter read out and I know that Conservative Members are not enthusiastic about it because most of them have not read it. However, we have a veto on social security and social protection of workers—the non-wage costs. If those wicked continental Governments are seeking to impose their social costs on us, we can prevent them by using our veto. Have the Conservatives not realised that?

Mr. Rammell: Some clarity and some facts are welcome in the debate.
The rhetoric used by the Conservatives is important. The right hon. Member for Old Bexley and Sidcup (Sir E. Heath) said to the former Prime Minister, the right hon. Member for Huntingdon (Mr. Major), a couple of years ago:
I hope that my right hon. Friend can influence the Government, so that we British can be proud of the things that are our heritage. That is completely different from spending our time attacking our allies and neighbours for what, allegedly, they are doing, because that is xenophobic."—[Official Report, 7 February 1996; Vol. 271, c. 410.]
He was not talking about the Labour party or the Liberal Democrats: he was talking about the Conservative party and Conservative Members. That is why I made the point.

Mr. Letwin: I apologise for intervening again so soon, but the point made by the hon. Member for North Durham (Mr. Radice) must be nailed. It is clear in article 137 of the social chapter that we do not have a veto over measures relating to working conditions. The fears that were being expressed by my hon. Friends arise on precisely that point.

Mr. Rammell: I did not hear those comments from my hon. Friend: I heard him mention social security legislation and, on those issues, we have the veto.
I shall move on to some of the working conditions proposals in the social chapter.I speak on the issue with some knowledge, because I was a senior manager in the public sector for 10 years before 1 May.I understand the practical need for flexibility and adaptability in the workplace. I also understand the frustrations of being unable to get employees to adapt and change.
If we are to compete and succeed economically and industrially, we need change. We need people to work in new and different ways and to show flexibility and adaptability. It is also crucial that employees have enthusiasm and commitment. That will happen only if people have security of employment—insecurity in employment is one of the biggest destabilisers that prevent people from being enthusiastic about and committed to their work—channels of communication so that people feel that they can put their views forward, and a sense of ownership and belonging to the organisation or company for which they work. That is the only way for people to work effectively.

Mr. David Davis: I have listened to the hon. Gentleman with some sympathy, but does he accept that companies can have good communications and industrial relations without all the regulations? All the best studies carried out in this country and across Europe—for example, in Holland—show that high levels of regulation lead to low levels of growth which lead to high unemployment. That does not help anybody.

Mr. Rammell: I do not believe that that is so. We can all select examples to prove our case. We should consider the experience of the Dutch which, in the past few years, has been a strong example of social partnership with both sides of industry working together. They have seen a transformation of the economic situation. We can all quote statistics from various countries to support our examples.
I was talking about the criteria needed for successful economies and industries. If those criteria are accepted—there seems to be a broad measure of agreement on both sides of the Committee—we have to make a decision about whether to follow the legislative route. Should the matter be left to employers and employees to negotiate or should the Government legislate for some basic minimum standards of fairness in the workplace? Even Conservative Members agree that some legislation is necessary—for example, health and safety legislation. Once that has been accepted, other legislation is a matter of judgment, including the judgment whether such legislation should be national or through the social chapter and the European Union.
Conservative Members are somewhat disingenuous about the issue. They have argued, in Committee and in European Standing Committees, that the employment protection proposals could be achieved through UK legislation. That is disingenuous because the Conservative party has given no evidence that it would support such legislation.
I support the legislation that comes from the social chapter for several reasons. We should judge the issue case by case. That is important, because one of the illusions that we suffered under the opt-out was that it would protect us. The longer the opt-out went on, the more it became clear that the social chapter was coming in through the back door. Companies were reacting to it, but—this is the key point—we did not have a seat at the negotiating table.
Employment protection legislation should also be achieved through Europe to ensure a level playing field. Some 60 per cent. of our trade is with other European

nations and it is important, so that one country does not gain a competitive edge over another, to have some basic minimum standards and costs.

Mr. Owen Paterson: Is the hon. Gentleman saying that the reason why legislation should not be presented in this House is because the Opposition would oppose it? That seems a strange reason.

Mr. Rammell: That is not what I said. I was drawing attention to the fact that Conservative Members are misleadingly giving the impression that they would support UK legislation in employment protection as an alternative to signing up to the social chapter. There is no evidence to sustain that argument.
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The British Government are right to use the social chapter and to judge the issues case by case. I genuinely believe that a balance must be struck between social costs and the burden placed on business. One of the frustrations of our debate is that it is unrealistically polarised. Conservative Members seem to claim that the choice is between total flexibility—with no legislation on any employment situation—and total restriction. That is not the real world and is not the situation that we face. A balance must be struck somewhere in the middle and that is a matter for negotiation in the workplace, in the House of Commons and in the European Union.
We have heard other arguments against the social chapter. The shadow Foreign Secretary, at the start of our debate on the amendments, seemed to say that Britain had the best record in Europe for inward investment and that the social chapter would damage the prospects of inward investment. That argument is fatuous. It was clear to any informed observer, and certainly any international business observer, for two years before 1 May, that it was likely that Labour would win the general election with a commitment to sign up to the social chapter. However, inward investment was not cut. It has not been cut since Labour was elected and signed up to the social chapter.
The argument is also misleading because when we consider the types of companies involved in inward investment we see that their wage costs and terms and conditions are way above anything introduced in the social chapter. It is misleading to suggest the social chapter is a factor in the equation when such companies decide on inward investment locations.
I also take fundamental issue with the view put forward by the shadow Foreign Secretary yesterday when he said that, in a competitive world, all the crucial decisions are taken at the margin. His argument was that marginal differences in price make all the difference. Price and labour costs are important, but the idea that the only route to economic and industrial success is to concentrate wholly on labour costs at the expense of anything else is one reason why the previous Government got it so wrong.
We have also heard many Conservative Members expressing concern about how social chapter proposals will impinge on jobs in this country. We heard that argument before the introduction of equal pay legislation, when the Conservative party claimed that giving women rights to equal pay would result in a significant reduction


in the number of women employed. However, following that legislation, we saw a dramatic explosion in the number of women employed.

Mr. Bercow: Does the hon. Gentleman believe that the parental leave directive will increase employment in Britain?

Mr. Rammell: In the longer run, it may well have an impact in attracting people back into the workplace, but I do not want to polarise the arguments artificially, as the hon. Gentleman is attempting to do. The parental leave directive, giving three months' unpaid leave, which the vast majority of people will not take up, because they will not want to forgo a quarter of a year's salary, is completely marginal in relation to the number of people who are taken on or made redundant in a workplace. That argument is fatuous.
The key issue of the social chapter was fundamentally and conclusively resolved in the general election. In any general election campaign and in any manifestos issued by political parties, there is a series of issues on which people vote; but some issues have added saliency, and people understand the clear division on them between the political parties. The social chapter was one such issue.
That was certainly my experience on the doorstep: people understood that the Conservative party had negotiated the opt-out and was there to protect it, and that if Labour was elected we would sign up to the social chapter. People voted overwhelmingly, in historic proportions, for that proposition. We should remember that in this debate.
Sometimes on the doorstep one comes across hostility to Europe and the European Union, but in seven years' campaigning I have yet to come across one person in my constituency who has said that he or she would not vote Labour because we wanted to sign up to the social chapter. The prominence that Conservative Members give to that issue is way beyond its recognition and understanding among the general public.
The issue is about bringing the country into the 20th century and taking it through to the 21st. People want minimum standards of fairness; they understand the need for flexibility, but they want the other side of the coin as well. If we can achieve minimum standards of fairness in employment through Europe, that is what people want us to do. That is why they want us to sign up to the social chapter.

Mr. Swayne: I ask the hon. Member for Harlow (Mr. Rammell) to read the Official Report of yesterday's sitting; there he will read of the seriousness of his accusation, made in the Committee's first sitting, with respect to xenophobic rhetoric. I would not want to repeat that now.
Instead, I want to draw the Committee's attention to new clause 27. In many respects, it concerns one of the less controversial aspects of the treaty as a whole. Notwithstanding the fact that Conservative Members are wholly opposed to the social chapter and its implications, we accept that the British people were warned and, as the hon. Member for Harlow pointed out, gave the Government a mandate. New clause

27 recognises that. It would put into effect a means of monitoring the activity of the legislation and would enable us to pass resolutions on it.
When I went to Germany the summer before last, I arrived just after the Prime Minister—then the Leader of the Opposition—had addressed the German equivalent of the Confederation of British Industry. He was well received, but had he stayed to listen to the debate that followed his address, he would have been somewhat embarrassed, because business man after business man got up and asked for the same Thatcherite reforms for Germany that we had experienced in our labour markets in Britain: reforms which the right hon. Gentleman had voted against at every opportunity.

Mr. David Davis: My hon. Friend is being too kind. The current Prime Minister was sitting in the front row when the head of the German CBI said that Britain, after 15 years of Tory reforms, was the best equipped country in Europe to face global competition.

Mr. Swayne: I thank my right hon. Friend for that intervention. Our delegation had gone to Germany precisely to discuss with German business organisations and individual business men how they might achieve the same reduction in social legislation and social costs as we had. At every meeting, I asked the Germans how much they believed that their problems arose from their own internal legislation, and how much from the social chapter. We know the answer, because we know that at the time the social chapter consisted of only two elements; but they were completely unaware of, and had given no thought to, that question.
New clause 27 will prevent such an occurrence in this country. It is right and proper that businesses and the House should know the source from which such legislation arises, because the Government with their majority can implement whatever social protection they choose.
Many Labour Members have implied that we Conservatives are against social protection. It is not a question of being for or against social protection: the treaty that the Government have signed effectively raises the possibility of our having to implement social protection legislation of which we disapprove, and which we fear may generate unemployment.
The Government made their intention clear from the outset, and trailed their objective well in advance. In so doing, they failed to exact any price whatever for their concession. As a result, the concession has been pocketed and more has been and will be demanded by their partners. That was an act of unilateral disarmament which will cost this country dear.

Mr. Coaker: It is interesting to be able to participate in the debate and comment on the amendments. In all the meetings of European Committees, in European Standing Committee B, and in this Committee, we start from the premise that we have one group, the Conservative party, that is by and large Euro-sceptical, and another, the Labour party, that is not Euro-fanatical but is determined to work within the European context to try to improve matters. It is important to set out that philosophical divide, because the arguments on both sides should be seen in that context.
There is a continual re-run of arguments that are almost about whether we should be in Europe in the first place and whether we should participate in anything European. The amendments are not constructive amendments, designed to improve Britain's position: they are wrecking amendments. They arise from a desire that Britain should take no part in the drive to improve European standards.
Why should our people be denied the minimum standards that are being given to other workers throughout Europe, and the employment and social policies that promote jobs and fairness in a European context? We all want a voice at the table, not isolationism. Without flexibility in the labour market throughout Europe, there is bound to be increased unemployment.
Why do Conservative Members appear to want to deny our work force the protection and rights at work, and the proper health and safety regulations, that are common to the rest of Europe? To try to achieve all those aims for our own workers and our own country would not be to abrogate our sovereignty to the rest of Europe; it would be a way of trying to assert our sovereignty.

Mr. Crispin Blunt: The hon. Gentleman should bear in mind the fact that we operate in a world market, not only a European market. If we give authority to Europe to decide those matters for us, we limit our ability to make decisions in our own interest so that we can trade in the world in the best possible way. We are a global trading nation, and global free trade should be our final objective, not tying ourselves into Europe. The danger is that we will tie ourselves into a fortress Europe. That is where the social and employment chapters are leading us.

Mr. Coaker: I appreciate the hon. Gentleman's argument, but, as has been said, the Government recognise that we operate within a global economy. If we are part of a strong Europe we will achieve more than we would if we opted to be little Englanders, working within the confines of our nation state. As part of a European block and co-operating with one another, we will achieve more than by opting for the individualistic, narrow, nationalist road which the hon. Gentleman would prefer us to follow.

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Mr. Robathan: When the hon. Gentleman talks about what we can achieve, does he believe that we will gain the same employment prospects as those on continental Europe? After all, they are not very good. I was in the House when we debated the Maastricht treaty and I saw the same starry-eyed optimism among Members then, but I must say that most of them are now rather disillusioned.

Mr. Coaker: I cannot speak for those individuals, but I am certainly not disillusioned or a starry-eyed optimist. I am a realist and, in my view, the employment prospects of our people and those across Europe will be better served by co-operating at a Europewide level rather than by taking a narrow nationalist view.
The Government believe that, as a proud, modern state, we can achieve certain benefits at national and European level. The Opposition argue that the provisions of the employment and social chapter on people's rights at work will make our country more uncompetitive. We believe,

as will be argued with ever increasing force, that those provisions will make us more competitive because a motivated, happy, contented work force, who enjoy good standards at work, will achieve and prosper more than those who are disaffected and driven by minimum standards.
The Opposition argue that if we accept the social chapter we will be burdened by over-regulation. Instead of scaremongering about bureaucracy and peddling myths about over-regulation, the Opposition should consider how they could fight for higher standards. All they want to do is deny our people the rights enjoyed across Europe.

Sir Teddy Taylor: It does not matter two hoots whether one is a Euro-sceptic or disillusioned. It is abundantly clear from the directive on the 48-hour week that the European Commission is prepared to bring in the social chapter by majority vote, using the health and safety provisions. Surely it is a denial of democracy to spend all this time arguing about an issue when there is nothing to decide.
Does the hon. Gentleman not accept that, irrespective of his attitude, that of the Opposition or anyone else, the battle was lost when the European Commission brought in the 48-hour week under health and safety provisions, according to the majority vote? Does he not accept that it could behave like that on every aspect of the social chapter?

Mr. Coaker: I do not accept that. The Government are putting forward an alternative point of view. We are talking about working together in Europe. Perhaps we will not get everything we want every time, but, by being a co-operative member of the European Community, working to achieve common goals, the impact on our country will be far greater than it would be if we tried to achieve such goals on our own.

Mr. Radice: The working time directive was not decided under the social chapter. It was brought in under health and safety regulations which are already in the treaty of Rome. The argument of the hon. Member for Southend East (Sir. T. Taylor), who is my colleague on the Treasury Select Committee, is irrelevant to the social chapter. He has read it and he knows that many matters are not subject to qualified majority voting, including, for example, those relating to social security and social provision. Social provision, which has been spoken about most by the Opposition, is governed by a national veto.

Mr. Coaker: I thank my hon. Friend for that intervention; his experience in such matters speaks for itself.
Some specific benefits are starting to be apparent from the employment and social chapter provisions. I do not believe that there is anything more important than making job creation and employment the top priority in Europe. I believe that our people and those in Europe would agree with that.
The Government believe that we can create more jobs and better employment prospects by working together. The title on employment included in the treaty refers to that and to the need to increase the scope for skills and training, which is particularly important. It advocates that


all the policies of the European Union and its nation states should take into account the need to create employment opportunities and promote equal opportunities.
Once we have such social polices in place, we can begin to tackle unemployment and social exclusion. The amendments tabled by Conservative Members are designed to wreck the Government's aim. Why should our workers and families be denied the same rights and standards as those enjoyed by people in the rest of Europe? That question needs to be answered. Conservative Members would deny our citizens those standards.
Other improvements have been agreed in the face of continued opposition from Conservative Members. This morning in European Standing Committee B, we discussed the part-time workers directive, which is designed to ensure that part-time workers have the same rights and entitlements as full-time ones. The hon. Member for Buckingham (Mr. Bercow) may raise his eyes in amazement, but such workers are looking forward to further legislation to protect their rights at work. If we are serious about creating flexible labour markets, we need to ensure that part-time workers have the same rights as full-time ones and that they are protected at the workplace.
It is important to consider the implications of the European works councils directive, which also points to the right way forward. Conservative Members disagree with the idea that workers should be consulted and involved in decisions about planning for the future. That directive is a significant attempt to involve workers in their companies. Such involvement would help to create the motivated work forces about which I have already spoken.
Another directive of particular importance, with far-reaching repercussions, is the parental leave directive. Many people will not understand why Opposition Members are opposed to it. It does not reflect the old type of society that Conservative Members want to represent, but the new, modern society in which we live. If Conservative Members want to deny the fact that parents increasingly want to be with their children either at their birth, or some time during their early years, they are not living in the same world as I do. That directive offers not only unpaid leave for child care, but leave to parents who need it for urgent reasons.

Mr. Derek Twigg: Would it be true to say that the attitude of the Conservative party suggests that it is anti-family?

Mr. Coaker: Their attitude reflects one of the key features of the election and of this debate: the fact that the Conservative party represents the old values of the Britain of yesterday and the new, vibrant Government represent Britain as it is today and people's demands as we move forward. The parental leave directive is all about improving standards at work, increasing flexibility and trying to work together with the rest of Europe to solve common problems. If Conservative Members disagree with that statement, they deserved to lose the last election. Only by working together can we achieve common success and tackle common problems.

Sir Teddy Taylor: I shall make a short, simple speech—I guarantee to take no more than two minutes—and I hope that the hon. Member for Gedling (Mr. Coaker) will think about what I say.
It is a bad thing to hand over the power to make laws to another body if one cannot do anything to change those laws when they go wrong. Time after time with Europe, we have seen promises go wrong, and there is absolutely nothing we can do about it. Take agriculture policy: this afternoon, we witnessed the pathetic sight of a Minister trying to pretend that health considerations were involved in his decision on bovine spongiform encephalopathy. We all know that that is a load of codswallop, but the Minister of Agriculture, Fisheries and Food is desperately seeking any way to get the curtailment of trade with Europe removed, and he believes that introducing all sorts of strange new health proposals will help somehow. The Minister is a nice person, but we are kidding ourselves if we believe that.
What can the hon. Member for Gedling do about agriculture policy? He knows that it is going terribly wrong and that it is costing his constituents a fortune. He knows that it is an insult to the poor people of the world that we are spending millions of pounds destroying food. I am sure that as a member of the Labour party, he is upset at our spending £1,200 million on growing high-tar tobacco that will end up in the third world. I am sure that he is offended and outraged by all that, but there is nothing that he can do about it. The main argument against transferring powers is that if things go wrong, there is nothing we can do about it.
To that extent, the social chapter and all the things the hon. Gentleman was talking about are a big problem—a democratic problem. If he wants to introduce proposals to improve the lot of working people in co-operation with other nations, that is fine. We can hold expensive conferences in five-star hotels, which I am sure some Labour Members would be glad to attend. We could agree with other European countries to take action together on a national basis in a way that would give us a let-out—if things went wrong, we could do something about it. Despite the unhelpful intervention by the hon. Member for North Durham (Mr. Radice), who is usually more constructive, I hope that Labour Members will appreciate that whether we are Euro-sceptic or Euro-enthusiasts, all the stuff about the social chapter is deliberately misleading the people of Britain. Whether or not we have the social chapter, the laws can still be applied to us.
I remember that the previous Conservative Government were keen to protect the interests of Great Britain and its people and anxious to do so promptly. When we heard that the 48-hour week directive was to be applied through health and safety legislation, the Government got terribly angry—and rightly so. They said, "Surely these European chaps cannot do that—it is illegal and wrong." The Government took action by going along to the courts to try to get it sorted out, but sadly they failed. The hon. Member for North Durham is correct in saying that if we want to change social security laws—for example, to give extra protection to single mothers, as some Labour Members want—we cannot do so by majority vote. The plain fact is that, as the experience of the 48-hour week directive shows, the sort of social legislation that we have been talking about tonight can be applied through health and safety.
Most of those present tonight are younger Members—I am one of only two old people here. I hope that younger Members will think about the roller-coaster effect of the European Union—whether or not we agree to things, they happen anyway. Hon. Members who were here in 1988—I know you were, Mr. Martin, as you are a most conscientious attender—held wonderful debates on the Bill that became the Merchant Shipping Act 1988 and said how we were going to stand up and make sure that the quotas were given to British fishermen. Today's younger Members would have been delighted to hear us—they would have been jumping up and down, waving Union Jacks and shouting, "Hooray, hooray!" Yet a few years later, we found that that law had been torn up by the European Court and that our constituents were going to have to pay huge amounts of compensation to people who pretended that they were British when they were in fact Spanish or Dutch.
That is all terribly sad, and hon. Members should appreciate that democracy is declining quickly. Whether they vote for or against the amendment—there are perfectly good reasons for either course of action—they should remember that it is pointless nonsense. At the end of the day, whether we have the social chapter or not, the European Union can apply all the social legislation it wants. It cannot do anything for single mothers, as the hon. Member for North Durham rightly pointed out, but it can bring in many other sorts of social legislation through something that was passed a long time ago and which we were led to believe was concerned only with ensuring that we did not have mice and rats on factory floors. If hon. Members doubt that, they should look back over the debates on the health and safety clause. It was made clear then that only health and safety considerations were involved, such as making sure that workers did not catch bad diseases from rats and mice.
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Whether the hon. Member for Gedling votes for or against the amendment, I hope that he will think carefully about the interests of democracy. What is important is not what the Committee agrees to, but what extra powers will be achieved by the European Court and by the European Commission. To that extent, I hope that hon. Members who have attended conscientiously and shown an interest in European affairs that has been lacking until now will appreciate that battles are lost without even being fought. That is not a laughable matter—it is desperately serious and very worrying for the democratic system.

Mr. Tony McNulty: I respect the long-held and consistent views of the hon. Member for Rochford and Southend, East (Sir T. Taylor), but I cannot help thinking that the litany that he has just gone through owes much to the lack of real determination shown by the Conservative Government in defending British interests. They had 18 years to try to do something about the common agricultural policy, which most hon. Members would agree is seriously flawed, but achieved precious little. Megaphones and handbags prevailed over hanging in there and preserving British interests, and that was a real shame.
It is also a shame that, in the British context, much of the debate—tonight and at other times—has concentrated on extreme positions. Conservative Members will know where I am coming from when I say that I defeated a

gentleman called Hugh Dykes; he sits at one end of the continuum of views on Europe, and I deprecate such blind Europhilia—it is of no use to anyone and it is not the line taken by the Labour Government. Although I would not include the views of the hon. Member for Rochford and Southend, East, I equally deprecate the views of the other extreme, which were ably represented by the hon. Member for West Dorset (Mr. Letwin) in European Standing Committee B. He stood up and said that both he and the hon. Member for Ruislip-Northwood (Mr. Wilkinson), who did not demur, were happily extremist on European issues.
The difficulty with the debate in Britain starting from those extreme points is that they drive the agenda, whereas the reality is located in the middle. From 1 May, the Government have taken a realistic, pragmatic line in all matters European, which, in both actions and deeds, puts British interests first to a far greater extent than did the megaphone and the handbag.

The First Deputy Chairman of Ways and Means (Mr. Michael J. Martin): Order. It might help the hon. Gentleman to know that we are not debating all matters European, but the amendment that deals with employment and social provisions. Perhaps he would care to address that matter.

Mr. McNulty: I fully accept that, Mr. Martin, and I apologise for the somewhat lengthy introduction to my comments on the amendments, which will follow on in part from my colleagues' speeches.
We discussed social and employment provisions this morning in European Standing Committee B, and we have previously discussed other matters that may or may not be germane to the debate. As we saw in Committee this morning, we tend to hear either conspiracy theories or a litany of abuse against what the hon. Member for Ruislip-Northwood described this morning as a quisling Government, who are happily selling out British interests to—in a paraphrase of the hon. Gentleman's words—Johnny Foreigner from Brussels.
That is quintessentially the prevailing view among Conservative Members in European Standing Committee B, as we saw this morning when we discussed part-time work and the works councils directive. The sum of their argument this morning was that the works councils directive was nothing to do with workers but rather was interfering with managers' right to manage and should not happen. The hon. Member for Ruislip-Northwood described parental leave as a licence for men to go fishing. Quite where he got that from I do not know and he did not put it into the context of the directive. On part-time work, the clear thrust of Conservative Members' views was that part-time workers are not real workers anyway and do not deserve any rights at all.
In essence, as was said this morning and as has been said more than eloquently by my hon. Friends this evening, each of those elements will set in train good business practice. It is extremely complacent to say that the best companies do this anyway. The social and employment dimensions of European policy are about bringing the worst up to the best. Would that it were possible to ignore the need to do that and hope and pray—as Conservative Members seem to do—that it will be the case, but it is not. We are concerned with maintaining


flexibility and not going back to over-regulation. Conservative Members view any form of intervention and regulation, however light the touch, as a return to 1960s and 1970s corporatism or statism, which it clearly is not.
Conservative Members, as ever, have quoted selectively from the treaty. The right hon. and learned Member for Folkestone and Hythe (Mr. Howard) referred only last night to article 128. What he did not say is that article 127 says clearly that the competencies of member states will be respected. Conservative Members do not like that, because it does not fit in with their arguments, so they ignore it. It is always the same during significant debates on Europe. If the facts staring them in the face do not bear any relation to their perception of reality, they ignore them. They believe that the European directives on part-time work, works councils and parental leave are the start of some deep, misguided, socialist conspiracy to harness latter-day western European capitalism to the shackles of 1960s corporatism, which will destroy our flexibility and competitiveness.
It is sad that, to varying degrees and over varying centuries, Conservative Members argue from various positions in the dark ages. The reality is that within the European dimension we seek flexibility through employability, which has resulted in some of the measures that I have talked about, but also through competition and welfare reform. Conservative Members need to consider the whole package, not just the parts that they select for the development of the theory of world domination by the massive European state. Conservative Members must have regard to all aspects of the employment and social dimension of the treaty, rather than pick holes in it.
All those elements clearly need to be underpinned by decent minimum standards of fairness at work. When we discussed those elements of the directives this morning, we were not talking about what many of my hon. Friends would consider luxury in terms of parental leave, works councils and part-time work. We were talking about establishing minimum standards in those areas, and that is what will prevail when we come to consider other areas. That is the reality.
There is no conspiracy other than the conspiracies of silence, megaphones and handbags that we have had for 18 years which have got us into this position. Had we been fully committed during that time to fighting for British interests, as the Government have done in a pragmatic, cohesive and professional way since May, Britain would now have a level playing field. There is no huge conspiracy, no pulling one little thread out from one element of the treaty and exploding it into some massive conspiracy, which is what Conservative Members have done time and again.
I appreciate your exhortation, Mr. Martin, so I shall finish on this point. Conservative Members maintain that harmonisation of imperfect and unfair tax is the co-ordination of every element of the fiscal code for Britain and every other country into some super-European structure, but that is wrong. The same applies to social and employment legislation. Conservative Members were wrong then and they are wrong now. They can whistle in the wind—I think that that was a phrase used this morning—until the cows come home, as long as they are doing it in opposition. British interests will then prevail

in the European dimension, and the irrelevance of Conservative Members and their views will be all the more profound.

The Minister of State, Foreign and Commonwealth Office (Mr. Doug Henderson): It is always best to quit when one is ahead.
We have had a good debate, beginning with the pitch of the right hon. and learned Member for Folkestone and Hythe (Mr. Howard), who set out clearly his views on the matters before us. We have also had many interesting speeches from hon. Members on both sides of the House, many of them made with passion.
I hope that the House will forgive me if I do not reply individually to hon. Members. I felt that I had to yesterday and I rather felt that I had offended an important section of my friends in the Smoking Room. I have no wish to make matters worse this evening, so I shall try to be more precise.
The hon. Member for Somerton and Frome (Mr. Heath) asked whether the Government would consult their social partners on the question of appointments to the Employment Committee. I hope that the hon. Gentleman will not press his new clause, but if he does I shall have to resist it. The Government have a deliberate policy of extensively engaging our social partners on many occasions. I have already met the principal representatives of the Confederation of British Industry, the Institute of Directors, the Trades Union Congress, the regional organisations of those bodies and representatives of a number of other business sections.
The committee that is envisaged is a committee of international civil servants. It will look at the way in which legislation is to be processed. That is in no way a substitute for a proper committee of people who are involved in industry and commerce who know what is happening on the ground. The Economic and Social Committee is the proper body for that. To some extent, the Committee of the Regions also fulfils that role. We intend to continue to consult those bodies and others and to take into account their views on this committee. However, the appointments will be from civil servants.
With regard to new clause 27, we cannot come back to the full House on every occasion, but there is an agreement to be reached under the provisions that we are debating. This is an opportunity for the House to express a view in principle. There will be another opportunity on Third Reading. The Government are already committed to improving scrutiny of all European matters, including those. I hope that that reassures the hon. Member for North Dorset (Mr. Walter).
There are three main questions before us. The first is what is the purpose of the social chapter. The second is whether there should be an employment clause in the treaty. The third, on which many hon. Members have focused, is whether there is a contradiction between having a social chapter and an employment clause, and being a competitive economy. I shall take those reasons in order.
First, I was proud to sign the social chapter when I went to the intergovernmental conference on 5 May and confirmed it in the treaty. It is right that, in the areas covered by the social chapter, British workers should have the same protection as workers in other European Union countries. I am happy to defend that concept in any


council and I would say to those who disagree that industrialists throughout the country realise that in the Europe that we operate in—we are part of Europe and part of the European Union—that is an essential feature of, in a sense, the contract.
8.30 pm
The second reason why I believe it is important to support the social chapter is that I want British social partners to have a say in the matters that will be discussed in any case by those who are involved in the social chapter discussions in the European Union institutions. The problem with the previous Government was that, by opting out, they gave away their authority to influence what was happening. The previous Government, by default, agreed to qualified majority voting in many areas as a result of the Maastricht treaty. They cannot complain now that the new Government in Britain were responsible for that because, patently, that was not the case.
Our social partners now have the opportunity to have their voice heard, to make known what they think is best dealt with in employment regulation at a European level and—very important—to make their views known on what they consider can be best achieved at a domestic level in national Parliaments. That is a very important advantage of our signing up to the social chapter.
The third reason why I believe it was right to sign the social chapter is that the British people, on any test of opinion, demonstrated in the general election on 1 May, by their choice of the parties that they voted for, that they wanted British workpeople to have that protection and wanted Britain to be involved in the discussions. I am pleased to confirm that the social chapter is a positive thing and that the Government welcome it.
I shall now discuss the employment clauses. I shall try to summarise to save time. There were references to employment in the treaty of Maastricht and previous treaties. The Amsterdam treaty gives appropriate prominence to the issue of employment. It says that the seeking of a high level of employment is a major purpose—a major function—of the European Union and the European Community. The treaty outlines how that should be achieved.
I say in all humility that the role of the new Government was not insignificant in getting that clause into the treaty. We succeeded in increasing the prominence, among the things that the European Community seeks, of the concept of employability—of European workpeople being better able to take on the challenges of tomorrow because they have better skills and a better education. That was achieved by the new British Government.
What is in the treaty in that regard may be summarised in four parts. First, the treaty says that all policy must be gauged against its employment implications. Who could disagree with that ambition? Secondly, it says that employment policies should be co-ordinated and that there should be a recognition of what can best be achieved at a European level and what is best achieved at a national level. Who could argue with that? Thirdly, it says that there should be an annual report, so that people, not Governments, throughout Europe know what is happening on the employment agenda, what has been agreed at a European level, what is being discussed, what is being agreed at a national level and when measures will come into effect.
One of the problems of the European Union on employment issues is that it is difficult to know what is happening at any of the stages of development. Industrialists and workpeople in this country often do not know what is happening about part-time workers, about working time or about consultation. They become confused because of the lack of focus or clarity. The employment clause forces all of us who are involved in these issues to be precise, to be communicative and to let people know what is happening. That is another important thing. Who could disagree with it?
Spending programmes have been mentioned. Limited spending programmes arise out of the summit in Luxembourg, but the spending is from existing funds, so there are no other expenditure implications.
I believe that there is a strong case for supporting the employment clause.
Even if there is a strong case in social terms for the social chapter, and even if there is a strong case for having employment ambitions and for co-ordination, should we decide not to incorporate those provisions into our law because of the damage that they will do to the competitiveness of our economy? In my opinion, we would be wrong to reach that conclusion.
The competitiveness of our economy is a crucial issue. Apart from the security of our nation, it is perhaps the most crucial. In a country such as Britain, which trades more of its national product than any other comparable country, making our economy competitive so that it can generate wealth and take on export markets is a central motive of any economic policy, but I believe that getting competitiveness right is not about knocking down wages or the standard of workers. It is about motivating workers, about raising their educational standards and about raising the skills of workpeople so that they can take on the challenge of tomorrow.
Workpeople in industry know how to secure the future of their job. They know that it is important to have new designs, new products and new ideas. They know about the importance of marketing. They know that it is important to manufacture products in a way that means that they can be sold at a competitive price, to be productive and to be flexible in the organisation of work at the workplace. All those things are crucial, so the Government have strongly emphasised the need for flexibility at the workplace to help in the running of our economy.
Flexibility is sometimes wrongly interpreted as meaning knocking down the levels of workers. If we try to improve the competitiveness of our economy only by knocking down the rates of pay and the conditions of workers, we shall patently fail because we will not be able to meet the challenge of tomorrow. Every company in the country that is an enterprising unit, whether it be large or small, knows that that is the case. To achieve competitiveness, one must motivate, and to do that one must treat workers reasonably. Part of that treatment is to give them the measure of support that they can get from the social chapter.
However, the social chapter is not only about what can be agreed at a European level; it is also about recognising that some things are better dealt with at a nation state level. When the Government judge that that is the case, and especially when that is reinforced by what our social partners tell us, we are determined to make it the case that


those matters are determined at a national level. That important section of the treaty of Amsterdam is to be commended to the House and to the British people.
I reject the proposed amendments.

Mr. Michael Howard: I shall be brief in responding to the debate. I agree, of course, with the Minister that it has been a good debate. Unfortunately, none of the essential arguments advanced by Opposition Members throughout the debate has received a vestige of an answer from the Government. None of the facts that we have cited has been challenged; none of the evidence has been impugned.
Given the economic performance of the United Kingdom over the past few years when compared with the performance of our partners in Europe, who have been subjected to the burdens that are contained in the social chapter and are similar to those that can be provided by the social chapter in future, there is no doubt that our performance has been superior.
The Government have failed entirely to answer our cardinal point that there is no need for the additional protections and provisions contained in the social chapter. Even if they decided none the less that they wished to make provision for such matters—we know and have acknowledged throughout that there are differences of view between the Government and the Opposition on these issues—there is no need to do so through the European social chapter.
The hon. Member for Harlow (Mr. Rammell), who is no longer in his place, sought to cast doubt on the Opposition's argument because he claimed that on the whole we do not favour legislation to provide additional social protection. That is true, but I have news for the hon. Gentleman, which is that the Labour party has a large majority in the House of Commons and, therefore, does not need our support for such provisions. If the Government wanted to introduce such provisions nationally, it would be the easiest thing in the world for them to do. There is no justification for subjecting the United Kingdom to measures that could be imposed on us, given that qualified majority voting applies to so many aspects of the social chapter against our will.
We know that proposals to which the Government are opposed have been brought forward under QMV. It is nonsensical for the Minister to say, as he did a few moments ago, that where there are matters that can best be decided on a national basis, we shall ensure that they are so decided.
By signing up to the social chapter, the Minister has deprived himself of the right to advance that argument. It can no longer be said. We can be outvoted on matters that even the present Government think would not be appropriate for the United Kingdom.
Nor did the Minister seek to deny that the employment debate guidelines that will be provided under the employment chapter will be mandatory in terms of the influence that they have on our employment policy, which could be subject to the jurisdiction of the European Court of Justice. That would enable the court to direct certain employment policies to be pursued by the United Kingdom even if the Government were convinced that they would be entirely against our interests. There has

been no denial by the Minister about that. The only vestige of an argument that we have heard from the Government is that we should be in there, as it were, because otherwise we shall not be able to influence things.
I must caution the Government about that argument. There are so many organisations and ventures that we could join to obtain some influence, but in some instances there would be the most disagreeable consequences. The argument may be relevant, but it can never be decisive. It is an argument which should be treated with great caution.
Some extraordinary speeches have been made by Labour Members. For example, the hon. Member for Ealing, North (Mr. Pound)—he told us at some length that he had to dine elsewhere and so is no longer in his place—said that we need not worry about anything under the social chapter because there was a new attitude on the part of other countries in Europe. I am not entirely certain which of the examples referred to by my hon. Friend the Member for North Dorset (Mr. Walter) the hon. Gentleman had in mind. Perhaps he was thinking of the new desire on the part of the French and Italian Governments to introduce a 35-hour working week as demonstrating the new attitude to flexibility in Europe.
The hon. Member for Gedling (Mr. Coaker) argued that it is important for us to join the social chapter so as to obtain new flexibility in our approach to employment. He was not entirely clear. I thought that he would keep secret to the end of his speech precisely what he meant by flexibility arising from the social chapter. It became clear in the end that the hon. Gentleman meant that new measures were proposed for part-time workers.
There may be arguments in favour of introducing new measures for part-time workers, but to describe that approach as introducing a new flexibility into working conditions in the workplace is to deprive language of all meaning.
I think that it was the hon. Members for Harrow, East (Mr. McNulty) and for North Durham (Mr. Radice) who said that if we examine the language of the social chapter, everything will be fine. Unfortunately, neither of them was present for the most illuminating speech of my hon. Friend the Member for Altrincham and Sale, West (Mr. Brady), who told us exactly how flexibility was viewed by the Commission. He told us that Commissioner Flynn spoke of positive flexibility—an entirely new dimension to the phrase.
It is significant that every Conservative Member who has spoken has emphasised the importance that we attach to employment and jobs. We can always legislate to improve working conditions and to make social provision at the workplace more attractive, but when we do that we find that there are fewer and fewer people at work who are entitled to those benefits.
We believe passionately that a job is the best escape route from poverty, that work is the prize for which we should strive and that reducing unemployment should have a proper place in our policy prescriptions. We believe that signing up to the social chapter will do enormous damage to all those objectives. That is why we shall press the amendment to a Division.

Question put, That the amendment be made:—

The Committee divided: Ayes 126, Noes 332.

Division No. 104]
[8.45 pm


AYES


Ainsworth, Peter (E Surrey)
Lewis, Dr Julian (New Forest E)


Amess, David
Lidington, David


Ancram, Rt Hon Michael
Lilley, Rt Hon Peter


Arbuthnot, James
Lloyd, Rt Hon Sir Peter (Fareham)


Baldry, Tony
Loughton, Tim


Beggs, Roy
Luff, Peter


Bercow, John
Lyell, Rt Hon Sir Nicholas


Beresford, Sir Paul
MacGregor, Rt Hon John


Blunt, Crispin
Mclntosh, Miss Anne


Body, Sir Richard
MacKay, Andrew


Boswell, Tim
McLoughlin, Patrick


Bottomley, Peter (Worthing W)
Madel, Sir David


Bottomley, Rt Hon Mrs Virginia
Malins, Humfrey


Brady, Graham
Maples, John


Brazier, Julian
Mawhinney, Rt Hon Sir Brian


Brooke, Rt Hon Peter
May, Mrs Theresa


Browning, Mrs Angela
Moss, Malcolm


Bruce, Ian (S Dorset)
Nicholls, Patrick


Burns, Simon
Norman, Archie


Cash, William
Ottaway, Richard


Clark, Rt Hon Alan (Kensington)
Page, Richard


Collins, Tim
Paterson, Owen


Cormack, Sir Patrick
Prior, David


Curry, Rt Hon David
Randall, John


Davis, Rt Hon David (Haltemprice)
Redwood, Rt Hon John


Day, Stephen
Robathan, Andrew


Duncan, Alan
Robertson, Laurence (Tewk'b'ry)


Duncan Smith, Iain
Roe, Mrs Marion (Broxbourne)


Emery, Rt Hon Sir Peter
Rowe, Andrew (Faversham)


Faber, David
Ruffley, David


Fabricant, Michael
St Aubyn, Nick


Fallon, Michael
Sayeed, Jonathan


Flight, Howard
Shephard, Rt Hon Mrs Gillian


Forth, Rt Hon Eric
Shepherd, Richard


Fox, Dr Liam
Simpson, Keith (Mid-Norfolk)


Fraser, Christopher
Smyth, Rev Martin (Belfast S)


Gale, Roger
Soames, Nicholas


Garnier, Edward
Spelman, Mrs Caroline


Gibb, Nick
Spicer, Sir Michael


Gill, Christopher
Spring, Richard


Gillan, Mrs Cheryl
Streeter, Gary


Gorman, Mrs Teresa
Swayne, Desmond


Gray, James
Syms, Robert


Green, Damian
Tapsell, Sir Peter


Greenway, John
Taylor, Ian (Esher & Walton)


Hamilton, Rt Hon Sir Archie
Taylor, John M (Solihull)


Hammond, Philip Tyrie,
Taylor, Sir Teddy


Hawkins, Nick
Tyrie Andrew


Hayes, John
Viggers, Peter


Heathcoat-Amory, Rt Hon David
Walter, Robert


Horam, John
Waterson, Nigel


Howard, Rt Hon Michael
Wells, Bowen


Howarth, Gerald (Aldershot)
Whitney, Sir Raymond


Hunter, Andrew
Whittingdale, John


Jackson, Robert (Wantage)
Widdecombe, Rt Hon Miss Ann


Jenkin, Bernard
Wilkinson, John


Johnson Smith,Rt Hon Sir Geoffrey
Willetts, David



Winterton, Mrs Ann (Congleton)


Key, Robert
Winterton, Nicholas (Macclesfield)


King, Rt Hon Tom (Bridgwater)
Woodward, Shaun


Kirkbride, Miss Julie
Yeo, Tim


Laing, Mrs Eleanor
Young, Rt Hon Sir George


Lait, Mrs Jacqui
Tellers for the Ayes:


Lansley, Andrew
Mr. James Cran and


Letwin, Oliver
Mr. Oliver Heald.




NOES


Adams, Mrs Irene (Paisley N)
Armstrong, Ms Hilary


Ainger, Nick
Ashton, Joe


Alexander, Douglas
Atherton, Ms Candy


Allan, Richard
Atkins, Charlotte


Allen, Graham
Ballard, Mrs Jackie

Barnes, Harry
Denham, John


Barron, Kevin
Dobbin, Jim


Bayley, Hugh
Donohoe, Brian H


Beard, Nigel
Doran, Frank


Begg, Miss Anne
Dunwoody, Mrs Gwyneth


Beith, Rt Hon A J
Eagle, Angela (Wallasey)


Bell, Martin (Tatton)
Eagle, Maria (L'pool Garston)


Bennett, Andrew F
Edwards, Huw


Benton, Joe
Efford, Clive


Bermingham, Gerald
Ellman, Mrs Louise


Berry, Roger
Ennis, Jeff


Best, Harold
Ewing, Mrs Margaret


Betts, Clive
Fearn, Ronnie


Blackman, Liz
Fitzpatrick, Jim


Blears, Ms Hazel
Flint, Caroline


Boateng, Paul
Follett, Barbara


Borrow, David
Foster, Rt Hon Derek


Bradley, Keith (Withington)
Foster, Don (Bath)


Bradshaw, Ben
Foster, Michael Jabez (Hastings)


Brake, Tom
Foster, Michael J (Worcester)


Brand, Dr Peter
Foulkes, George


Breed, Colin
Galbraith, Sam


Brinton, Mrs Helen
Gapes, Mike


Brown, Rt Hon Nick (Newcastle E)
George, Andrew (St Ives)


Brown, Russell (Dumfries)
George, Bruce (Walsall S)


Bruce, Malcolm (Gordon)
Gerrard, Neil


Burden, Richard
Gilroy, Mrs Linda


Burnett, John
Godman, Norman A


Burstow, Paul
Godsiff, Roger


Butler, Mrs Christine
Gordon, Mrs Eileen


Byers, Stephen
Gorrie, Donald


Caborn, Richard
Grant, Bernie


Campbell, Alan (Tynemouth)
Griffiths, Jane (Reading E)


Campbell, Mrs Anne (C'bridge)
Griffiths, Nigel (Edinburgh S)


Campbell, Menzies (NE Fife)
Griffiths, Win (Bridgend)


Canavan, Dennis
Grocott, Bruce


Caplin, Ivor
Grogan, John


Casale, Roger
Gunnell, John


Caton, Martin
Hain, Peter


Chapman, Ben (Wirral S)
Hall, Mike (Weaver Vale)


Chaytor, David
Hall, Patrick (Bedford)


Chidgey, David
Hanson, David


Chisholm, Malcolm
Harvey, Nick


Church, Ms Judith
Heal, Mrs Sylvia


Clapham, Michael
Healey, John


Clark, Rt Hon DrDavid (S Shields)
Heath, David (Somerton & Frome)


Clark, Dr Lynda(Edinburgh Pentlands)
Henderson, Doug (Newcastle N)



Henderson, Ivan (Harwich)


Clark, Paul (Gillingham)
Hepburn, Stephen


Clarke, Charles (Norwich S)
Heppell, John


Clarke, Eric (Midlothian)
Hesford, Stephen


Clelland, David
Hill, Keith


Clwyd, Ann
Hodge, Ms Margaret


Coaker, Vernon
Hoey, Kate


Coffey, Ms Ann
Home Robertson, John


Coleman, Iain
Hood, Jimmy


Colman, Tony
Hope, Phil


Connarty, Michael
Hopkins, Kelvin


Cook, Frank (Stockton N)
Howarth, Alan (Newport E)


Cooper, Yvette
Howarth, George (Knowsley N)


Corbett, Robin
Howells, Dr Kim


Cotter, Brian
Hoyle, Lindsay


Cousins, Jim
Hughes, Ms Beverley (Stretford)


Crausby, David
Hughes, Kevin (Doncaster N)


Cryer, John (Hornchurch)
Humble, Mrs Joan


Cummings, John
Hurst, Alan


Cunningham, Jim (Cov'try S)
Hutton, John


Dafis, Cynog
Iddon, Dr Brian


Dalyell, Tam,
Illsley, Eric


Davey, Edward (Kingston)
Ingram, Adam


Davey, Valerie (Bristol W)
Jackson, Helen (Hillsborough)


Davidson, Ian
Jamieson, David


Davies, Rt HonDenzil (Llanelli)
Johnson, Alan (Hull W& Hessle)


Davies, Rt Hon Ron (Caerphilly)
Johnson, Miss Melanie(Welwyn Hatfield)


Dawson, Hilton



Dean, Mrs Janet
Jones, Helen (Warrington N)

Jones, Jon Owen (Cardiff C)
Oaten, Mark


Jones, Dr Lynne (Selly Oak)
O'Brien, Bill (Normanton)


Jones, Martyn (Clwyd S)
O'Brien, Mike (N Warks)


Kaufman, Rt Hon Gerald
O'Neill, Martin


Keeble, Ms Sally
Öpik, Lembit


Keen, Alan (Feltham & Heston)
Osborne, Ms Sandra


Keetch, Paul
Palmer, Dr Nick


Kemp, Fraser
Pearson, Ian


Kennedy, Charles (Ross Skye)
Pendry, Tom


Kennedy, Jane (Wavertree)
Pickthall, Colin


Khabra, Piara S
Pike, Peter L


Kilfoyle, Peter
Pollard, Kerry


King, Andy (Rugby & Kenilworth)
Pope, Greg


King, Ms Oona (Bethnal Green)
Powell, Sir Raymond


Kingham, Ms Tess
Prentice, Ms Bridget(Lewisham E)


Kumar, Dr Ashok
Prentice, Gordon (Pendle)


Ladyman, Dr Stephen
Prescott, Rt HonJohn


Laxton, Bob
Purchase, Ken


Leslie, Christopher
Radice, Giles


Levitt, Tom
Rapson, Syd


Lewis, Ivan (Bury S)
Raynsford, Nick


Lewis, Terry (Worsley)
Reed, Andrew (Loughborough)


Linton, Martin
Reid, Dr John (Hamilton N)


Livsey, Richard
Rendel, David


Lloyd, Tony (Manchester C)
Roche, Mrs Barbara


Llwyd, Elfyn
Rogers, Allan


Love, Andrew
Rooker, Jeff


McAllion, John
Rooney, Terry


McAvoy, Thomas
Rowlands, Ted


McCabe, Steve
Ruane, Chris


McCafferty, Ms Chris
Ruddock, Ms Joan


McCartney, Ian (Makerfield)
Russell, Bob (Colchester)


McDonagh, Siobhain
Ryan, Ms Joan


Macdonald, Calum
Salter, Martin


McDonnell, John
Savidge, Malcolm


McFall, John
Sawford, Phil


McGuire, Mrs Anne
Sedgemore, Brian


McIsaac, Shona
Shaw, Jonathan


McKenna, Mrs Rosemary
Sheerman, Barry


Maclennan, Rt Hon Robert
Sheldon, Rt Hon Robert


McNulty, Tony
Singh, Marsha


MacShane, Denis
Skinner, Dennis


Mactaggart, Fiona
Smith, Jacqui (Redditch)


McWalter, Tony
Smith, John (Glamorgan)


McWilliam, John
Smith, Llew (Blaenau Gwent)


Mahon, Mrs Alice
Smith, Sir Robert (W Ab'd'ns)


Mallaber, Judy
Southworth, Ms Helen


Marek, Dr John
Spellar, John


Marsden, Gordon (Blackpool S)
Squire, Ms Rachel


Marshall, David (Shettleston)
Starkey, Dr Phyllis


Marshall-Andrews, Robert
Steinberg, Gerry


Martlew, Eric
Stewart, David (Inverness E)


Maxton, John
Stewart, Ian (Eccles)


Meale, Alan
Stinchcombe, Paul


Michael, Alun
Stoate, Dr Howard


Michie, Bill (Shef'ld Heeley)
Stott, Roger


Michie, Mrs Ray (Argyll & Bute)
Stringer, Graham


Milburn, Alan
Stunell, Andrew


Miller, Andrew
Sutcliffe, Gerry


Mitchell, Austin
Swinney, John


Moffatt, Laura
Taylor, Rt Hon Mrs Ann(Dewsbury)


Moonie, Dr Lewis



Moore, Michael
Taylor, Ms Dari (Stockton S)


Moran, Ms Margaret
Taylor, Matthew (Truro)


Morgan, Alasdair (Galloway)
Thomas, Gareth (Clwyd W)


Morgan, Ms Julie (Cardiff N)
Timms, Stephen


Morgan, Rhodri (Cardiff W)
Tipping, Paddy


Morley, Elliot
Todd, Mark


Morris, Ms Estelle (B'ham Yardley)
Tonge, Dr Jenny


Morris, Rt Hon John (Aberavon)
Touhig, Don


Mudie, George
Trickett, Jon


Mullin, Chris
Truswell, Paul


Murphy, Denis (Wansbeck)
Turner, Dennis (Wolverh'ton SE)


Murphy, Jim (Eastwood)
Turner, Desmond (Kemptown)


Naysmith, Dr Doug
Turner, Dr George (NW Norfolk)


Norris, Dan
Twigg, Derek (Halton)

Twigg, Stephen (Enfield)
Willis, Phil


Tyler, Paul
Winnick, David


Wallace, James
Winterton, Ms Rosie(Doncaster C)


Ward, Ms Claire
Wise, Audrey


Wareing, Robert N
Wood, Mike


Watts, David
Woolas, Phil


Webb, Steve
Wright, Anthony D (Gt Yarmouth)


Welsh, Andrew
Wright, Dr Tony (Cannock)


Whitehead, Dr Alan
Wyatt, Derek


Williams, Rt HonAlan(Swansea W)




Tellers for theNoes:


Williams, Alan W (E Carmarthen)
Mr. Robert Ainsworthand


Williams, Mrs Betty (Conwy)
Mr. Jim Dowd.

Question accordingly negatived.

9 pm

Mr. Gary Streeter: I beg to move amendment No. 66, in page 1, line 13, after '2', insert '(except paragraph 13)'.

The First Deputy Chairman: With this, it will be convenient to discuss the following amendments: No. 67, in page 1, line 1·3, after '2', insert '(except paragraph 32)'.
No. 68, in page 1, line 13, after '2', insert '(except paragraph 33)'.
No. 69, in page 1, line 13, after '2', insert '(except paragraph 26)'.
No. 70, in page 1, line 13, after '2', insert '(except paragraph 45)'.
No. 71, in page 1, line 13, after '2', insert '(except paragraph 52)'.
No. 72, in page 1, line 13, after '2', insert '(except paragraph 53)'.
No. 73, in page 1, line 13, after '2', insert '(except paragraph 54)'.
No. 74, in page 1, line 13, after '2', insert '(except paragraph 6)'.
No. 75, in page 1, line 13, after '2', insert '(except paragraph 31)'.
No. 76, in page 1, line 13, after '2', insert '(except paragraph 55)'.
No. 7, in page 1, line 13, at end insert
'(except Article 2 paragraph 44)'.
No. 61, in page 1, line 13, at end insert
'except Article 2(16)'.
No. 25, in page 1, line 13, at end insert
'other than in Article 2, paragraph 6)'.
No. 30, in page 1, line 13, at end insert
'other than in Article 2, paragraph 12)'.
No. 31, in page 1, line 13, at end insert
'other than in Article 2, paragraph 13)'.
No. 32, in page 1, line 13, at end insert
'other than in Article 2, paragraph 14)'.
No. 35, in page 1, line 13, at end insert
'other than in Article 2, paragraph 21)'.
No. 37, in page 1, line 13, at end insert
'other than in Article 2, paragraph 23)'.
No. 38, in page 1, line 13, at end insert
'other than in Article 2, paragraph 24)'.


No. 40, in page 1, line 13, at end insert
'other than in Article 2, paragraph 26)'.
No. 41, in page 1, line 13, at end insert
'other than in Article 2, paragraph 27)'.
No. 42, in page 1, line 13, at end insert
'other than in Article 2, paragraph 28)'.
No. 43, in page 1, line 13, at end insert
'other than in Article 2, paragraph 29)'.
No. 45, in page 1, line 13, at end insert
'other than in Article 2, paragraph 31)'.
No. 46, in page 1, line 13, at end insert
'other than in Article 2, paragraph 32)'.
No. 47, in page 1, line 13, at end insert
'other than in Article 2, paragraph 33)'.
No. 48, in page 1, line 13, at end insert
'other than in Article 2, paragraph 34)'.
No. 49, in page 1, line 13, at end insert
'other than in Article 2, paragraph 35)'.
No. 50, in page 1, line 13, at end insert
'other than in Article 2, paragraph 36)'.
No. 57, in page 1, line 13, at end insert
'other than in Article 2, paragraph 44)'.

Mr. Streeter: This group of amendments deals with two specific issues: the extension of qualified majority voting agreed at Amsterdam, and the extension of the power of the European Parliament, particularly its co-decision powers. On both issues, the Amsterdam treaty amounts to a significant transfer of influence from this Parliament to the institutions of the European Union. On both issues, new Labour failed at Amsterdam. A Government without values and principles have returned to the House of Commons with a treaty that has failed the people of Britain and failed the people of Europe.
It is not part of my argument to maintain that the 15 extensions of qualified majority voting—20, if we include the social chapter—contained in the Amsterdam treaty, and the 23 additional areas in which the European Parliament has been given a veto, constitute in themselves the end of the United Kingdom as a sovereign nation state. Clearly they do not, and we do not pretend that they do. It is my strong and passionate conviction that the concessions that our negotiators gave away at Amsterdam were wholly unnecessary. They represent a significant reduction in the influence of this Parliament and of the British Government, and an increase in the influence of the EU institutions, so there is a transfer of power from the House to Brussels. Those concessions have been given away with nothing in return for the British people.

Mr. Radice: I am glad that the hon. Gentleman admits that the treaty of Amsterdam does not amount to a threat to the nation state. I listened carefully to the shadow Foreign Secretary, who said on a number of occasions that, if we signed up at Amsterdam, it would be a grave threat to the nation state. How can the hon. Gentleman square his position with what his right hon. and learned Friend said before the election?

Mr. Streeter: I can do so very easily. The hon. Gentleman misquotes me. I said that the extension of

qualified majority voting and the extra powers given to the European Parliament—not the Amsterdam treaty as a whole—do not, of themselves, undermine the nation state. Many months ago, my right hon. and learned Friend made it clear that, had it been passed, the original agenda for the Amsterdam summit would have brought an end to the nation state. He did not make those comments about the consequences of the summit. Nor has the hon. Gentleman heard him say that in any of the debates, at all of which I have been present.

Mr. Gapes: If the original remarks were about the agenda, is that why the Conservative party is no longer pressing for a referendum on the Amsterdam treaty? Does it now recognise that it is a modest treaty which brings about no significant or serious change?

Mr. Streeter: Having heard the hon. Gentleman's contributions over the past three days of the debate, I believe that he would sign up to anything that comes out of Brussels. Provided that it has the word "European" in it, he is happy—never mind the consequences, or the heart or content of the policy. If it is European, he loves it; that is all he has to say.
Before Labour's negotiators even landed in Amsterdam, they revealed their hand to our partners. Before they even arrived at the Council meeting, our partners were licking their lips at the great new Labour giveaway. Before the Minister jogged even halfway through the tunnel, leaving his Union Jack shorts behind, the team awaiting him at Brussels were rubbing their hands—

Mr. Menzies Campbell: Come on. Keep a straight face.

Mr. Streeter: How can I keep a straight face? I am telling a joke.

Mr. Blunt: My hon. Friend makes a good point. It is illustrated by the fact that, when in opposition, Labour announced the concessions that it would give before it entered the negotiations. No wonder it got such a rotten deal.

Mr. Streeter: That is absolutely right. My hon. Friend eloquently makes the point that I am seeking to make. Before they even left this country to go to the summit, the Government told the world media all the things that they were to give up. What a way to negotiate. No wonder they got such a bad deal.

Dr. Stephen Ladyman: The hon. Gentleman's thesis appears to be that the agenda for the Amsterdam treaty talks would have led to the death of the nation state. The negotiators came back with nothing as serious as that, yet, somehow, he is not giving the Government credit for coming back with something better. I do not follow that argument.

Mr. Streeter: The hon. Gentleman does not follow the argument because he is incorrect in his assessment. The original Amsterdam summit agenda from some of our European partners and from the Commission was the issue that we were discussing, not this country's


negotiating position. This country's negotiating position was seriously undermined as a result of the implications of 1 May.
Our partners were licking their lips at the great new Labour giveaway. They knew that this Government had a clear agenda: to give away Britain's competitive advantage under the social protocol, Britain's veto and Britain's position of negotiating strength, established over many years. As my hon. Friend the Member for Reigate (Mr. Blunt) has said, new Labour had already said that it was going to give all that away, so the other member states did not have to offer a single concession in return. Given that sorry performance, I am surprised only that the Government bothered to translate the treaty into English.
One thing is clear: new Labour does not know how to negotiate. Its negotiators did not achieve the best deal on offer. It let itself, the House and Britain down. What a contrast with our approach.

Mr. Roger Casale: The hon. Gentleman suggests that the Labour Government caved in on QMV, but, in certain areas, we view QMV as positive, and we positively campaigned on it. How can he say that we positively campaigned for QMV, and then, when we achieved what was our negotiating objective, say that we caved in? That is illogical.

Mr. Streeter: The hon. Gentleman makes a valid point. Yet again, the Labour party does not know how to stand up for British interests. It does not understand how the European Union works.

Mr. Doug Henderson: Does the hon. Gentleman agree that the previous Government wanted to include in the Amsterdam treaty provisions to counter fraud? Does he also accept that, because the previous Government were so isolated from the negotiations and would not talk to the others, and the others would not talk to them, they were unable to make any progress to counter fraud? If one is to have an effective provision to tackle fraud, it has to be by qualified majority voting or the country that has been accused of mismanagement of funds will veto it. Does the hon. Gentleman accept that that is a positive example of where it has been necessary to have QMV? Because the Conservative Government were so isolated from the negotiating proceedings, they could achieve nothing. A good deal was achieved by the Labour Government, in addition to many other things.

Mr. Streeter: I say it again: the Minister does not understand how Europe works. One of the fundamental reasons for retaining the veto is to enable better negotiations to take place. It is often the veto which will bring people to the negotiating table. The fact that our proposals on fraud did not attract full support one month, two months or three months away from the summit does not mean that they would not have been agreed at the weekend of the summit itself. The Minister knows, or should know, that things are often agreed at the very last minute at European summits. It is the countries that preserve their veto and are prepared to use it which can

bring others to the negotiating table. The Minister is the one who has signed away so many of our rights with nothing in return.

Mr. Cash: It seems that the Minister completely misunderstands the problems that can arise when it comes to countering fraud and that he misunderstands the role of the Court of Auditors. In practice, it is precisely because so many of the other member states have not been interested in dealing with fraud—and, as far as one can judge, are still not—that qualified majority voting will not work in our favour. There need to be serious changes, including changes to the procedures of the Court of Auditors, so that each member state has proper arrangements for dealing with fraud at a national level. Those arrangements should be in line with the arrangements that we have, which include the Comptroller and Auditor General and the Public Accounts Committee. That would be the way to get all member states to adopt proper anti-fraud measures.

Mr. Streeter: I am grateful to my hon. Friend for that intervention. As usual, he makes a telling and important point which has great substance.
The Minister will say that we agreed to QMV in the Single European Act. Of course we did, and we got the single market in return, which has brought greater benefits to Britain than to any other European country. We accepted QMV in limited areas for a specific purpose and got a real benefit in return. That simply did not happen at Amsterdam.
The Government may also say that we agreed new areas of QMV at Maastricht, and of course we did, but we got the vital opt-out from the social chapter and from economic and monetary union in return. I must add that it is the very opt-out from EMU which the Government are now exercising to the full, showing how important it was that we won it in the first place. No such victories were won at Amsterdam.

Mr. Radice: Is it not the case that, as the Library's research paper on the Bill states:
Member States are required to take the same measures to combat fraud affecting the financial interests of the Community as they take regarding similar fraud affecting their own interests"?

Mr. Streeter: I am familiar with those words. I have to say that I have compared the way we do things in this country with the way things are done in some other European Union countries, especially the Mediterranean ones, and those words do not reassure me at all.
We made it clear in our manifesto that the Single European Act and the Maastricht treaty established appropriate limits to the scope of application of QMV. When the Conservative Government agreed to extensions of QMV, we made sure that the people of Britain got a good deal in return. What this Government have done is to give yet more extensions of QMV at Amsterdam—wholly unnecessary extensions—and get nothing in return.
Let us remind ourselves of what the Foreign Secretary claimed to have achieved for the nation at Amsterdam in exchange for these concessions. On 12 November, he claimed two major gains in Britain's national interest. The first, he said, was the protection of our frontier controls, but my right hon. and learned Friend the shadow Foreign


Secretary demonstrated that Dutch presidency had already accepted in March this year—two months before the general election— that we would never give up our border controls.
That first major achievement for Britain heralded by the Foreign Secretary was precisely that— a Major achievement, negotiated by the former Prime Minister, my right hon. Friend the Member for Huntingdon (Mr. Major). It was something which the previous Government had already achieved, as was widely acknowledged earlier in the year by the press.
The second achievement claimed by the Foreign Secretary was that attempts to incorporate the Western Europe Union as the defence arm of the European Union had been prevented. However, for the first time, the treaty— in article J.7— includes the words:
The Union shall accordingly foster closer institutional relations with the WEU with a view to the possibility of the integration of the WEU into the Union, should the European Council so decide.
As many Conservative Members have already pointed out, that is not what the Foreign Secretary claimed in the debate on article 1. The paragraph gives the Commission all the legal scope that it needs to start the gradual process of integration— for which it is so famous and at which it is so skilled— of the WEU into the EU.

Mr. Menzies Campbell: The hon. Gentleman is undoubtedly already thoroughly familiar with article J.7. If it is a matter of, as the language says,
should the European Council so decide",
am I right in thinking that there would have to be a unanimous decision of the entire Council and that, so long as the United Kingdom retained the veto to which he referred, the measure could not be imposed on it?

Mr. Streeter: In theory, the hon. and learned Gentleman is correct, but my point is a different one. The wording of article J.7 would give the Commission the legal scope to start work on the integration process—to get its ducks in a row—by persuading, encouraging and cajoling member states to sign up for the agenda that it desired. For many years, that has been the Commission's tendency. Clause 1 would give it the scope to do precisely that.

Mr. Blunt: The hon. and learned Member for North-East Fife (Mr. Campbell) has missed the point that article J.7 is part of a progressive framing of a common defence policy.

Mr. Menzies Campbell: Like Maastricht.

Mr. Blunt: Not like Maastricht; the word progressive was not in that treaty. The word "progressive" was conceded by the Government, for nothing in return.

Mr. Streeter: My hon. Friend is absolutely right and picks up the theme of this debate: so many concessions were given by the Minister, the Prime Minister and the Foreign Secretary at Amsterdam, with nothing in return. My hon. Friend has mentioned one more concession.,
The Foreign Secretary's claim rings hollow. Even he could find nothing else in the Amsterdam treaty that he could trumpet as compensation for the people of

Britain for the many concessions that they have made. There was nothing for Britain's fishermen or farmers, nothing to help Britain's exporters and not a single step towards completion of the single market. All those concessions were made with nothing in return.

Mr. Casale: I am grateful to the hon. Gentleman for shedding some light on the general thrust of his argument. At the start of his speech, he seemed to suggest that he was against qualified majority voting in principle. He has now moved on to say that, in some areas, the national interest may be served by qualified majority voting, and that he would support it in those cases. I am confused now, however, about the argument that he seems to be making that changes to the EU's institutional arrangements have been agreed because we get some concession or trade-off in another area. The previous Prime Minister, Margaret Thatcher, agreed to so many changes to qualified majority voting so that we could have a single market. The changes were the means to that end.
Similarly, changes have been agreed in other areas to enable us to have the benefit—

The First Deputy Chairman: Order. The hon. Gentleman cannot make a speech in an intervention.

Mr. Streeter: The hon. Gentleman has not been listening to my points. If he does not yet understand that Europe works precisely in the way that he has described, he has a lot to learn.
Equally important to our long-term interests is the Government's failure to play Britain's strongest card in institutional reform. They gave away our second Commissioner and got nothing in return. Before the Amsterdam summit, there was an unshakeable link between vote weighting and the number of Commissioners.
The Committee will be aware that we have 10 votes in the Council of Ministers for 56 million people in the United Kingdom. That is one vote for every 5.6 million people. Luxembourg had two votes for 400,000 people. That is one vote for every 200,000 people. Luxembourg is 28 times over-represented compared with the UK. There is a similar pattern in the distribution of the 626 Members of the European Parliament. The five big countries are under-represented compared with the smaller nations.
In the past, our under-representation has been reflected by our second Commissioner. It was understood that we would give up that second Commissioner only in exchange for significant changes in the balance of power on the Council of Ministers and a redistribution of Members of the European Parliament. Article 1 of the protocol on page 88 of the revised treaty makes it clear, however, that, at the Amsterdam summit, Britain agreed for the first time in a legally binding protocol, on which others may rely in the Court of Justice, to give up its second Commissioner. That was Britain's trump card and it has been surrendered without a struggle. Our second Commissioner was given away without any binding agreement on vote weighting.

Mr. Doug Henderson: Does the hon. Gentleman accept that a change in the number of Commissioners is subject to a reweighting of votes? We specifically achieved that in the negotiations.

Mr. Streeter: The hon. Gentleman may not have read the wording of the treaty sufficiently carefully, as I shall explain.
The lost British influence is not to be restored by voting arrangements in the Council of Ministers, which more closely reflects the balance of population—not a bit of it. The second British Commissioner has been given away in exchange for a vague proposal for a future arrangement either to reweight the votes or—wait for it—to incorporate the principle of dual majority into Council decision making.
Dual majority is of no use whatever to the British people. It gives us no more influence; not a single extra vote. It gives us only a recognition that the population of the states that vote for a proposal must be taken into account. That is hardly comforting in the face of the Franco-German alliance. Influence has been given away for nothing in return.
The Minister's response suggests that he did not know what he had signed. He thought that he had agreed to give away our Commissioner in exchange for a clear commitment on vote weighting. That is not so. It shows that the Minister has slipped up. We already know that the Government have failed to challenge the Spanish amendment on the opt-in on border controls, and now we seem to have discovered another blunder by our man in Brussels. He has failed us again.

Mr. Ian Bruce: Does my hon. Friend agree—I hope that this point is helpful to the Minister—that we are debating amendments to a treaty which amends two treaties and certain Acts, yet we do not have a consolidated text? Clearly, Labour Members, who have not read the articles as well as my hon. Friend, are having difficulty in understanding what the issue is all about. Surely the Government should have provided a consolidated document which we could discuss.

Mr. Streeter: My hon. Friend makes a very important point. I have listened to almost all Labour Members' speeches over the past three sittings, and it seems that many of them have not read the treaty carefully. Many of them seem to be blinded by any piece of paper that says that it comes from Brussels.
If the Minister thinks that I am wrong on whether dual majority is of interest and any significance to British people, I invite him to get to his feet now to tell us how dual majority helps us in a decision-making process.

Mr. Doug Henderson: I have been specific. There is no question of the United Kingdom Government agreeing to any change in the Commissioners until there is a reweighting of the votes.

Mr. Streeter: I am even more worried than I was a few moments ago. The Minister has not read his brief properly, he has not read the treaty properly and he has not read the protocol properly. He has made another blunder.
That is bad enough, but the situation is worse. Not only will we give away our second Commissioner by 2003, to gain nothing in return, but the Government seem to have agreed, in article 2 of protocol D, that when the EU is enlarged to more than 20 states, there can be fewer Commissioners than member states. That means that we could be without a Commissioner. What a negotiating

triumph! That is why I say with such conviction that the new Labour Government failed at Amsterdam. They failed the House of Commons, they failed this country and they failed our people.
The Government did not stop failing there. They also gave away more power to the European Parliament. They gave more power to a Parliament that approaches legislation as though it were playing a game of poker�žit deals itself extra cards every time. They gave more power to Labour MEPs such as David Martin, Vice-President of the European Parliament, who said:
A socialist superstate is exactly what we do want to create.
They gave more power to MEPs who voted in September 1995 for the liberalisation of drug use, declaring that
drug dependence is … not a crime which calls for punishment
and that
drug users should not be prosecuted
unless actively involved in production, trafficking or dealing. They gave more power to Labour MEPs who voted in March 1996 to increase the number of fruits and vegetables included in common agricultural policy price support, even though the Labour party committed itself to the abolition of the CAP in 1994. They gave more power to Labour MEPs who, in April 1996, called for an increase in the rate of income tax, saying:
It is in the interests of all of us to … challenge the idea of cutting taxes.

Dr. Ladyman: Is the hon. Gentleman saying that the Conservative party has given up all hope of having more MEPs after the next elections?

Mr. Streeter: Not at all. I am simply pointing out what Labour's MEPs, who represent the people of this country in the European Parliament, are like. The Minister is happy to give them more power, gaining nothing for the British people in return.

Mr. Radice: What about those Conservative MEPs who support the treaty of Amsterdam?

Mr. Streeter: The hon. Gentleman should know that in our party we do not try to gag duly elected Members of Parliament, as the Labour party has disgracefully tried to do. They cannot even discuss issues that are relevant to their constituents. Labour should reconsider that.
I have an internal briefing note produced by the European Commission, dated 7 July 1997. This 12-page summary of the outcome of the Amsterdam summit for each Commissioner contains some interesting comments. Writing to itself, on page 9, paragraph 14, the Commission says, on the European Parliament:
The European Parliament made two major gains at the Conference to become a genuine co-legislator and a full arm of the European legislature alongside the Council:
Firstly the co-decision procedure has been considerably extended (see Annex p.1) essentially along the lines of the principle suggested by the Commission in its report of July 1996, whereby any instrument of a legislative nature should be adopted under the co-decision procedure between the European Parliament and the Council.
Despite its public pronouncements, the Commission's private assessment of Amsterdam is that the European Parliament made major gains.
Let us consider what co-decision means. It is nothing short of Euro-speak for a parliamentary veto. The European Parliament has a veto over decisions of the Council of Ministers. Labour has handed over extensions of that veto in 23 new areas.

Dr. Ladyman: From my recollection of the Conservative party manifesto at the election, I believe that the Conservative party was in favour of increasing the powers of the European Parliament. It said that that was one of the aspects that needed reform. Is the hon. Gentleman now saying that that has changed and that the Conservative party is completely against the European Parliament?

Mr. Streeter: The hon. Gentleman has obviously failed to read the treaty, and one can forgive him for that, but one cannot forgive him for failing to read the Conservative manifesto.
The power exercised in the legislative process in the EU is a delicate balance between national Parliaments, national Governments, the Commission, the Council of Ministers and the European Parliament. If the Government have agreed extensions of power to the European Parliament, which the Commission says they have, will the Minister tell us—I am happy to allow him to intervene—from whom the additional power has been taken? Has it been taken from the Commission? Not a chance. It has been taken from national governments and national parliaments, all for nothing in return.
Our objections to the failure of the Government do not relate only to the new areas in which co-decision is now to be used; they relate also to the complete failure to deal with problems in the day-to-day operation of the parliamentary procedures in Brussels. What efforts were made to counter the European Parliament's growing tendency to pack First Reading with spurious amendments to give itself areas in which it can force compromise during later conciliation; or is the Minister happy to see more than 600 amendments tabled, as during the progress of the trans-European network transport scheme; or is it the case that in Brussels, as in the United Kingdom, the Government simply do not understand the system that they are trying to reform?
Taken together with the increase in powers of the European Parliament and the extra powers that new Labour has given the President of the Commission, which we will discuss later, I hope that I have demonstrated to the Committee's satisfaction that the treaty represents a complete failure by new Labour. The Government have given up British influence with no extra influence in return. It is no wonder that, on page 2 of the private Commission assessment of the Amsterdam treaty, the Commission states:
For the most part the Treaty delivered the goods.
For whom? Perhaps the treaty delivered the goods for the European Parliament and the Commission, but it sadly did not deliver the goods for the British people.
The amendments demonstrate our determination to expose Labour's negotiating failures at Amsterdam. Let the Minister respond to this charge: why did he agree to so many concessions for so little in return? Let the Minister tell us in clear and detailed terms what benefits for Britain he brought back from Amsterdam in exchange for all the concessions.

Mr. Radice: One of the problems with the Conservative approach to European matters is the hyperbole of the language used. Nowhere has that been more true than in what Conservative Members have said about the Amsterdam treaty. Before the election, the right hon. and learned Member for Folkestone and Hythe (Mr. Howard), who was then Home Secretary, said that the agenda for the Amsterdam negotiations would undermine the nation state. Treaties are based on agendas, so the right hon. and learned Gentleman was implying that signing up to the treaty would undermine the nation state. Clearly it would not, and even the right hon. and learned Gentleman has had to row back from that ridiculously exposed position, which he hoped would win the general election for the Conservatives.
I admire and like the hon. Member for South-West Devon (Mr. Streeter) and he spoke attractively today. However, he also used hyperbole. The Conservative party will not recover its health unless it sees the world as it really is, but Conservative Members go in for gross exaggeration on any European issue. On a whole series of previous amendments, they said that the social chapter would lead to the undermining of our competitive position, but one has only to read the chapter to see clearly that it is fairly innocuous.

Mr. Ian Bruce: Will the hon. Gentleman give way?

Mr. Radice: No, I do not want to tempt myself down that path. I must return to the subject of the amendments.
The Conservative party has grossly overestimated the impact of Amsterdam. As the right hon. and learned Member for Rushcliffe (Mr. Clarke) said, it is very modest: a mouse of a treaty. It is so modest that I am surprised that he voted against it; perhaps it was a tactical decision, which may have been sensible from the point of view of his position in his party.
The treaty does not undermine the nation state. There was some limited extension of qualified majority voting—

Mr. Swayne: Will the hon. Gentleman give way?

Mr. Radice: No, I want to finish what I am saying.
There was a limited extension of qualified majority voting which was matched by a limited increase in the co-decision powers of the European Parliament. Those go together, because the best way to deal with the problem of accountability that arises with qualified majority voting is through the European Parliament.
I do not see anything particularly wrong with qualified majority voting in many areas, because I do not believe that Britain will always be in a minority of one on every issue. The problem with the Conservative party is that its assumption is that we shall never have any friends in the European Union, and that those awful continentals are so terrible and look at everything in such a totally different way from us that we shall never be able to form alliances with them.
That was a gross exaggeration even under the Conservative Government, who did occasionally find some people who would vote with them; but the new Labour Government has several obvious partners and is acting with them for the good of Europe. That is the sensible way in


which to proceed. Of course there are some key areas in which we should retain the national veto; any Government would do that for the foreseeable future.

Mr. Bercow: Oh!

Mr. Radice: I said "for the foreseeable future"—I thought that the Conservative party was rather enthusiastic about that formula.
The key areas include taxation, own resources, foreign policy, defence and immigration. It may be that in my son, daughter's, grandson's or granddaughter's time, there will be some change in one of those areas—I cannot foresee the future—but as things stand, that is how we conduct things.
If one wants to tackle fraud, it is sensible not to give individual nations vetoes with which they can stop Europe as a whole doing something about it. If fraud is so important—the Conservative party clearly believes that it is, and so do we—that is an obvious area for qualified majority voting.
Similar arguments are relevant for research spending and for greater openness in the European Community. Most people would like greater openness, so we do not want one country blocking procedures to develop it. That is a sensible argument, and I do not understand why the Conservatives make such a song and dance about it. The Conservative party is so ideological that it cannot see things as they are.

Mr. Swayne: Regardless of whether it is ideological or understandable, will the hon. Gentleman accept that when the previous Prime Minister said during the general election campaign that the then Leader of the Opposition would give up the British veto in six areas the right hon. Gentleman denied it—and then gave it up in 16 areas?

Mr. Radice: That does not really fall together with the charge that we made concessions before we actually started to negotiate. We set out our negotiating objectives because we believe that it is a good thing to work together in some areas, even if the Conservative party thinks that it is a bad idea to work together with any continentals on any issue. We happened to think that there were sensible objectives.

Mr. Brady: I fear that the hon. Gentleman is confusing working together from choice with—as can happen with QMV—being compelled to do something against one's wishes.

Mr. Radice: It is true that it is possible that fraud might be committed in our country and we might say that we would like to resist QMV. I believe that it would be a sensible thing for the good of Europe for the articles about fraud to apply on a qualified majority vote. I do not hold the view that any qualified majority voting is, per se, a bad thing.
In the days of the Maastricht treaty, Conservative Members expressed some concern about QMV. In the days of the Single European Act, the former Prime Minister, Lady Thatcher, occasionally said the kind of things that we have heard from Conservative Members

tonight. She was a practical person, however, and she realised that if one wanted to create a single market one had to have QMV because she did not want a situation in which a country could block progress in areas vital to this country. Qualified majority voting has probably benefited this country far more than any other country on the single market issue.

Mr.Cash: rose—

Mr. Bercow: rose—

Mr. Radice: I give way to the hon. Member for Stone (Mr. Cash), who is a veteran of such debates.

Mr. Cash: The hon. Gentleman may care to bear in mind something that has not been mentioned so far in the debate: QMV in relation to public health, particularly in relation to the BSE crisis on which we had a statement today. Does he really believe that it would be in the interests of the United Kingdom to have QMV, as expressed in an article that appeared a couple of months ago in theHealth Service Journal, which quite clearly suggests that there would be serious implications if one extended QMV to BSE? We would then never be able to get out of the current crisis.

Mr. Radice: Once again, the hon. Gentleman is using hyperbole. The problem about the hon. Gentleman, whose speeches I have listened to with great attention over many years, is that he invariably exaggerates the position. Even when he has a good case, he lets it down because he always make the situation sound so terrible. It is not. Normally, QMV is a practical way in which to proceed. Practical politicians from European countries get together and say what is in their best interests; often, QMV is the best way in which to proceed.

Mr.Michael Jabez Foster: My hon. Friend is an expert in such matters. Can he tell me how many times the previous Government agreed to QMV? Am I right in believing that they did so on 42 occasions?

Mr. Radice: Yes, but that was when they were in government. It is much easier in opposition to act as a fine, principled Opposition and be against any extension of QMV.

Mr. Bercow: rose—

Mr. Radice: I know what the hon. Gentleman is about to ask: whether I am in favour of this—yes or no?

Mr. Bercow: I am sorry to disappoint the hon. Gentleman. I am listening to his contribution with rapt attention. Does he accept that a continuous extension of QMV will ultimately break the umbilical cord which links the Government and the governed?

Mr. Radice: No, provided one retains exemptions that are key issues in the operation of the nation state. In other areas, such as fraud, QMV is plain common sense. That is what Amsterdam is about. I know that the hon. Gentleman wants to exaggerate and, as I have listened to him today, he has tended to do so. If he wants to use hyperbole,


he will say such things about QMV. He has already spoken about the ratchet effect; in my view, we are not witnessing such an effect, but the sensible way to proceed.

Mr. Bercow: rose—

Mr. Radice: No, I want to get on.
It is certainly true that it would be impossible to develop the single market without the development of QMV. I know that Conservative Members would like to deny the facts of geography, history and culture which prove that we are a European country. We are in the European Union and we can act together with our partners on a range of issues. In some areas we will want QMV, but not on the crucial issues.
If one has QMV and one is interested in accountability, that cannot be achieved only through the national Parliament. I am pleased to see that some reforms have been introduced—they were not mentioned by the hon. Member for South-West Devon—which will help this Parliament to scrutinise European legislation. For example, there will be legally binding minimum periods for the scrutiny of European Union documents. That is useful, and I am surprised that the hon. Member for South-West Devon did not congratulate the Government on signing up to that. Co-decision is sensible, because if we are to have qualified majority voting, and if we are interested in accountability, we have to enhance the position and strength of the European Parliament. I am not frightened of the European Parliament, but the hon. Member for South-West Devon appears to be.

Mr. Brady: Does the hon. Gentleman believe that the accountability that we derive through the European Parliament will be enhanced or lessened by the Government's proposals to change the system of election to the European Parliament, which will mean that his constituents and mine will not know for whom they are voting in the European elections?

Mr. Radice: I am in favour of proportional representation both in a general sense and in respect of the European Parliament, where it is sensible for the Parliament to reflect the votes cast. The swings between the parties resulting from small changes in votes under a first-past-the-post system—

The Second Deputy Chairman of Ways and Means (Mr. Michael Lord): Order.

Mr. Radice: I was answering a question.

The Second Deputy Chairman: I am well aware that the hon. Gentleman was answering a question, but I would be grateful if he would now get back to the amendment in hand.

Mr. Radice: I am grateful, Mr. Lord. I think that I answered the hon. Gentleman's question to my own satisfaction, if not to his.

Mr. Bercow: Will the hon. Gentleman give way?

Mr. Radice: I hope that the hon. Gentleman is not going to take up the question asked by the hon. Member for Altrincham and Sale, West (Mr. Brady) after what we have just heard from the Chair.

Mr. Bercow: If the hon. Gentleman does not accept that there is currently a ratchet effect working in favour

of increased powers for the European Parliament, will he kindly explain to the Committee when there has ever been a repatriation of powers from the European Parliament to the House of Commons? If he cannot demonstrate that there has ever been such repatriation, it follows that there is a ratchet effect working.

Mr. Radice: I thought that it was going to be one of those ratchet-effect arguments—[HoN. MEMBERS: "Answer."] I am not concerned about that, because we are increasingly working together as European nations on a whole range of issues. I rejoice in that fact, just as I rejoice in the fact that we do not have war. Such co-operation is a way to bind us together. The establishment of the single market means there are other areas in which we want to combine and co-operate, and that is precisely what is happening. If that is to be done at the level of the Council of Ministers, the European Parliament requires increased powers. That is precisely what we have got and I rejoice in that.
If I may correct the hon. Member for South-West Devon on one point, the European Parliament's powers have been increased vis-à-vis the Commission and especially vis-à-vis the President. For the first time, the Parliament will have the power to veto the nomination of the President, and I am in favour of that, although I am sure that the hon. Gentleman is not. He was therefore incorrect to say that there had been no change in the relationship between the Parliament and the Commission.

Mr. Collins: The hon. Gentleman refers to provisions in the treaty that would give the European Parliament a right of veto over the appointment of the President of the Commission. That is to transfer powers away from the Council of Ministers and therefore from national Governments. It in no way answers the point raised by my hon. Friend the Member for South-West Devon (Mr. Streeter) about transferring powers away from the Commission.

Mr. Radice: No, but it is giving powers to the Parliament vis-à-vis the Commission. That was an important change. It is a useful increased power for the Parliament.

Mr. Menzies Campbell: In considering the ratchet, or the lack of it, has the hon. Gentleman given any thought to the protocol on subsidiarity with regard to the Amsterdam treaty, which alters the onus of proof in relation to whether these matters should be dealt with at Community level or otherwise?

Mr. Radice: The idea of the founding fathers that the European Union would end up as a federal state or a federal super-state has now been undermined, and it was undermined at Maastricht by the subsidiarity clause which ensured that those areas where the nation state would be important should be given priority. One of the problems was that other European countries—I know that the hon. and learned Gentleman agrees with me here—also saw that as giving more power to the regions and local communities. The Liberal Democrats obviously did not, so their idea of subsidiarity was a partial one.
This is a modest treaty and a modest extension of qualified majority voting. Any British citizen, not blinkered in the way that Conservative Members


are, would support this perfectly sensible measure. They would also support the corresponding increase in the co-decision powers to the European Parliament. One follows from the other.
I congratulate my right hon. and hon. Friends on what they have done in this area. They have behaved in a sensible and pragmatic way. They looked at matters as they are and they had objectives. They did not give away the nation state. Such talk is for the birds. Rather, they promoted Britain's interests, in some cases by retaining the national veto and in others by co-operating and accepting qualified majority voting with our European partners.

Mr. Collins: This group of amendments goes to the heart of the bungled negotiating tactics and the missed opportunities which the treaty represents. As we have heard so much about the allegation that it is not possible to criticise the treaty without being anti-European, let me make what I hope the Committee will regard as an unambiguously pro-European case for the amendments
Like the hon. Member for North Durham (Mr. Radice), I was born a European and I will die a European. That is a fact of having been born in these islands. It is inevitable historically, culturally and geographically. Like the hon. Gentleman, I salute the fact that in the EU we have an institution which has brought together countries which, for centuries, have fought against each other, which has helped to create a single market which is open to British goods, and to which it is fundamentally in the national interest to belong.
However, that does not answer any of the issues before us today. Those issues concern the nature of the Europe to which we belong, not whether we belong to Europe. The difficulties with the extensions of qualified majority voting which the treaty and the Bill provide are twofold because they help to undermine precisely some of the merits and advantages that have led the Conservative party, clearly and consistently, to be in favour of British membership of the European Community.
In parentheses, since Labour Members always accuse us of 18 years of missed opportunities in Europe, it is worth noting that 14 years ago—within that time frame—the Labour party was advocating our entire withdrawal from Europe.
The key point about qualified majority voting is that it changes the nature of the organisation and government of the European Union. I fear that, in so doing, it challenges and starts to undermine the essential element of popular legitimacy that is required for any national or international organisation to operate.
Specifically, among existing member states the present treaty provisions will remove, over ever-expanding areas of policy, decision making from the national Parliament and the national Government with which all European citizens can most naturally identify, and will—fatally— start to undermine the feeling that even European institutions are organised on a proper democratic basis.
My hon. Friend the Member for South-West Devon (Mr. Streeter) drew attention to the fact that a great opportunity had been missed for an exchange, if any concessions were to be made at all, at least for a better

deal on qualified majority voting. The extensions in the treaty will mean that in even more areas it will be possible for Governments representing the majority of the people of Europe to be outvoted by countries and Governments representing a minority of the peoples of Europe.
The hon. Member for North Durham thought that to oppose qualified majority voting one had to believe that it was possible for the United Kingdom to be frequently on its own. That is not how qualified majority voting works. Qualified majority voting means that even if we have a number of allies we can still be outvoted and have measures imposed on us against our consent and that of others. As the Union expands, the number of allies needed will grow and the chances of our being outvoted, even with a number of allies, will grow. We missed an opportunity to alter the way—

Dr. Ladyman: The hon. Gentleman is developing an interesting theme. He says that one day it may be possible for a minority to take decisions that the majority in Europe do not agree with. Is that not the basis on which, for the past 18 years, the Conservatives ran this country?

Mr. Collins: It happens to be the basis on which the Labour party currently runs the country, as it only secured 42 per cent. of the vote, so I hardly think that that argument advances things for the hon. Gentleman.
An opportunity was missed to start to restructure the government of the European Union in ways that would bring its decision making closer to the people. One missed opportunity was the opportunity to restructure the operation of qualified majority voting. Another opportunity, which would have addressed the point raised by my hon. Friend the Member for Buckingham (Mr. Bercow) and sidestepped by the hon. Member for North Durham, was the missed opportunity to tackle the ratchet effect by demonstrating that the protocol on subsidiarity, of which we have heard much, has some practical effect. If it has, let us see a few directives, and a few competences, repatriated or reversed.

Mr. John Hayes: In developing this argument about democratic legitimacy, which I believe that he does appropriately, will my hon. Friend agree that the effect is multiplied by the increasing remoteness of the exercise of power and incomprehension on the part of the electorate? The point about the exercise that we are going through, which the treaty exacerbates, is that the vast majority of the electorate throughout Europe do not understand how those processes work because the thing is so deliberately esoteric, so that democratic legitimacy is not delivered on that basis as well as on the basis that my hon. Friend is explaining to the House.

Mr. Collins: I agree with my hon. Friend and I am grateful for the points that he makes.
The greatest achievement and the greatest purpose of the European Union may be to entrench democracy and to spread an area of peace across Europe. For that reason, the top priority for those negotiating on behalf of our country at Amsterdam should have been to make the Union flexible enough for rapid expansion. The argument that is usually advanced by the Labour party and other advocates of qualified majority voting is that more


QMV makes it easier to expand the European Union. I want to argue that in many respects that is contrary to the truth.
Most of the aspirant nations of central and eastern Europe which wish to join the European Union are members of the Organisation for Security and Co-operation in Europe, all of whose decisions are taken on a unanimity basis. Most of them are likely to join the North Atlantic Treaty Organisation at the same time as, if not before, they join the European Union, although NATO's decisions are taken on a unanimity basis. Most of those nations are most likely to be able to play a full and active part in the future destiny of the European Union if the European Union is not so inflexible and entrenched in its decision-making processes that it believes that every measure of legislation or directive or Community action must be imposed on every member in the same way at the same time.
The risk of expanding qualified majority voting in the way that is set out in the treaty and the Bill is that we entrench a model of the European Union that is centralised, uniform and inflexible. It will say to the countries of eastern Europe, "We are delighted that you pulled down the Berlin wall and expelled your communist dictatorships, but now we in western Europe will erect a new iron curtain to keep you out from your European home"—

It being Ten o'clock, THE CHAIRMAN left the Chair to report progress and ask leave to sit again.
To report progress and ask leave to sit again tomorrow.—(Ms Bridget Prentice.)

Committee report progress; to sit again tomorrow.

EUROPEAN COMMUNITY DOCUMENTS

Motion made, and Question put forthwith, pursuant to Standing Order No. 119(9) (European Standing Committees),

TOBACCO ADVERTISING

That this House takes note of European Community Document No. 6294/92 and the unnumbered Explanatory Memorandum submitted by the Department of Health on 17th November 1997, on tobacco advertising; and supports the Government's efforts to bring into effect a ban on tobacco advertising.—[Ms Bridget Prentice.]

Question agreed to.

STANDARDS AND PRIVILEGES COMMITTEE

Ordered,
That Miss Ann Widdecombe be discharged from the Committee on Standards and Privileges and Mr. Martin Bell be added to the Committee.—[Ms Bridget Prentice.]

Hellfire Pass (Memorial)

Motion made, and Question proposed, That this House do now adjourn.—[Ms Bridget Prentice.]

Mr. Anthony D. Wright: I am pleased to have secured a debate on a memorial for the far east prisoners of war. I am pleased also that my hon. Friend the Minister is here to respond to the debate.
The debate will serve as my maiden speech and it enables me to say that it is my great honour to represent and serve the people of my home borough of Great Yarmouth. I was born in Great Yarmouth and I went to school there. Before coming to this place, I spent all my working life there. I feel extremely privileged to have been elected its Member of Parliament.
It may seem strange to some that I have chosen the subject of a memorial to the far east prisoners of war for my maiden speech. I could, of course, have addressed many issues relating to my constituency; that being so, I shall briefly explain my choice. The subject was raised with me by one of my constituents whose father was a far east prisoner of war. I am sure that the issue is one which concerns other hon. Members and their constituents.
Since the war, we have seen a new relationship develop between Britain and Japan, but, while we look to the future, we must remember the past and all those who suffered on our behalf. The father of the constituent to whom I have referred was one of the many thousands of allied prisoners of war who were forced to construct the Thai-Burma railway line. She told me of the sadness that she felt over the lack of a fitting memorial to him and to other brave soldiers and civilians who died after being captured.
The most infamous section of the railway was that which was cut through a mountain at Konyu-Hintok, which became known as Hellfire pass. It is there that many veterans and relatives of the dead wish to see a memorial built.
Before I expand on the subject, I am sure that it will be understood that I wish to observe the convention of the House and introduce my constituency to right hon. and hon. Members and to pay tribute to my predecessor, and the former I can do ably. As I have said, Great Yarmouth is my home borough. I am sure that it is well known to other hon. Members as one of Britain's holiday resorts. What may be less well known is that it is also a centre for gas exploration, and second only to Aberdeen for activities within the oil industry.
There is also the port of Great Yarmouth, which we see as a gateway to northern Europe. This is a vision which is shared by the European Union, which sees the significance of the link between Ijmuiden in Holland and Great Yarmouth as an integral part of a trans-European route along the A47 from the midlands.
The port has always been integral to the town's success over its history. At the battle of Sluys in 1340, Yarmouth provided more ships than all the cinque ports put together, which ensured victory for Edward III. The king was so grateful that he halved his coat of arms of three lions and added their heads to the tails of Yarmouth's coat of three herrings.
The abundance of the herring was the source of our once vibrant fishing industry and has long been the symbol of the town. Unfortunately, the fishing industry


in the town has all but vanished, along with the herring. However, since 1966 we have been a strategic port for the North sea oil and gas industries, with their support industries providing employment for many people in the town. We also have thriving businesses in a wide range of sectors, from electronics to food production.
Despite these successes, unemployment in my constituency has remained at a higher than average level over the past 18 years. We welcome the Labour Government's commitment to improve our standard of living through better health care, greater investment in education and providing real opportunities in work and training for the long-term and young unemployed.
As a tourist destination, the borough of Great Yarmouth can offer something for everyone. We have the beauty of the Norfolk Broads in the north-west of the constituency, the secluded beaches of California and Scratby, and the family resorts of Great Yarmouth and Gorleston. This year, Great Yarmouth was named in the top five holiday resorts in the country, with 7 million bed-nights. Half the tourist expenditure in Norfolk is in Great Yarmouth.
I remember that when I was a youngster, holidaymakers would knock on our doors asking for a room for the night, because the hotels and boarding houses were all full up. Now, most of the thousands of visitors who come annually to the borough will stay in one of the many holiday centres that are located in the parishes of Caister and Hemsby to the north and Hopton to the south, where they will find all the facilities that one would expect in a modern tourist resort.
One of the centres in Hopton has recently won some prestigious awards. I was pleased to visit it a few weeks ago for the launch of a local Partners against Crime initiative. While I was making my speech to the audience of about 300 people, the modernisation of the holiday industry became obvious to me when I was heckled for the first time in my political career for referring to the centre as a holiday camp. However, I can assure hon. Members that we can offer a very good holiday, wherever they stay in my constituency.
The fact that the borough of Great Yarmouth is steeped in heritage is often overlooked. Yarmouth's unique system of town planning created the famous narrow rows, a few of which are still in existence. We can boast the second longest surviving stretch of mediaeval town wall, after York; the largest parish church in England; the remains of a Roman settlement at Burgh castle and Caister; and many other significant historic features.
Great Yarmouth has a rich and chequered history. Miles Corbet, a former Member of the House and resident of the town, was a personal friend and lawyer to Oliver Cromwell. He was the last signatory to the death warrant of Charles I. After the restoration, royal vengeance was demanded of Yarmouth for its republican stance, and all its charters and privileges were revoked. Later, in 1867, when political sleaze was rampant—unlike now—the constituency of Great Yarmouth was disfranchised after extensive bribery of the electorate was uncovered. It has not been recorded whether the money was paid in brown envelopes.
I assure hon. Members that no such persuasion was necessary for the people of Great Yarmouth to elect me. Great Yarmouth is a constituency of great diversity, with much in its tradition and past to be proud of, and much, I am sure, to look forward to in its future.
I turn now to my predecessor. Mr. Michael Carttiss was probably more of a thorn in the side of his own party than of the Labour party in the 13 years that he represented Great Yarmouth. On at least one occasion, he was suspended from the parliamentary Conservative group for voting against his own Government, most often on the subject of Europe, and he was a member of the gang of nine who were suspended for rebelling against Maastricht. I found that a bizarre stance by a Member whose constituency at that time was fighting—as it is now—to become a gateway to Europe. Nevertheless, Michael Carttiss is a man of great independence, outspoken honesty and strong character, factors which contributed in no small part to my election as his successor.
An advantage of making my maiden speech six months into this Parliament is that I can already see the benefits for my constituents that the Labour Government have brought. We have already had an extra £119,000 for breast cancer treatment for our local health authority; Norfolk education authority has been awarded £1·5 million towards the backlog of building and improvement work needed for the county's schools; and permission has been given for the building of a new power station in my constituency, which will bring £170 million of inward investment and create 300 construction jobs in an area which suffers from one of the highest unemployment rates in the eastern region.
The Government have given their blessing to a project to build a new outer harbour in the town, and I hope that the roads review will bring back the scheme to dual our stretch of the A47, known as the Acle Straight. That was accepted as a necessity by no fewer than 24 Conservative Ministers who held the roads portfolio during the 18 years of the previous Government, yet it was taken out of the programme last year in a cost-cutting exercise in order to fuel pre-election tax cuts. I am glad that this Government's roads policy will be based on sound economics, strategic planning and safety, and not sacrificed for such short-term political gains.
Although my focus while a Member of Parliament will be on fighting for my constituents, I have been fortunate to represent Parliament on a visit to Albania to oversee the recent elections there, and to New York, where a delegation from the House was introduced to the workings of the United Nations. I have also developed a sudden interest in finance as a result of being selected to serve on the Standing Committee on the Bank of England Bill. I am sure that my interests will continue to widen as my time here progresses.
I return to the subject of the debate. As I explained in my preamble, the matter of a memorial for the far east prisoners of war was brought to my attention by a constituent, Mrs. Carol Cooper, whose father, Lance Corporal William Smith—known as "Bill"—died while in captivity in Burma in 1943 when she was just four years old. During the two years he was imprisoned, he wrote an extensive diary in a book that he made himself, covered in fabric from his kit bag. In the diary, he not only recorded the daily events of his imprisonment but wrote many poems about his family and his experiences, recipes that he wished to cook when he returned home and the


home addresses of his fellow soldiers. Some of the names are marked with a cross. That was to signify which of his comrades had fallen on the journey from their original base at Changi in Si0ngapore as they marched towards Burma.
Lance Corporal Smith's family remained unaware of the existence of this remarkable document until Mrs. Cooper read about the auction of a diary written by a soldier of the Royal Norfolk Regiment in a Japanese camp. When she realised that it was her father's diary, she tried in vain to buy it back from the person who had purchased it. It was only after the BBC became involved and made a documentary about the diary that Mrs. Cooper was able to acquire the diary for herself.
Subsequently, the BBC took Mrs. Cooper to Thailand to retrace her father's steps as recounted in his diary, taking the route of the Burma-Thai railway. The Imperial Japanese army built the railway from 1942 to 1943 from Ban Pong in Thailand to Thanbyuzayat in Burma, with the intention of supplying the large Japanese army that was stationed in Burma. The railway was 250 miles long and was built through some of the most inhospitable and disease-ridden terrain in the world. There was little mechanical construction and its completion was achieved mostly through human effort. The project resulted in a huge loss of life for both prisoners of war and the Asian forced labour used to construct it.
About 13,000 POWs and 80,000 Asian labourers died from disease, sickness, starvation and brutality. One commentator has written that the
railway was built at the cost of a life for every sleeper.
That could certainly be true of the section of the railway that was hacked out of the jungle-covered mountain area at Konyu-Hintok where it is known that 700 prisoners of war died building just three miles of railway. A huge cutting was gouged through the mountainside in just 12 weeks. This is the infamous Hellfire pass, which got its name after someone looking down at the skeletal figures slaving at night by the light of bamboo fires remarked that it must be like working in the jaws of hell.
I should like to read an extract from the diary of Lance Corporal William Smith so that hon. Members can begin to understand the conditions in which these men tried to survive. The entry is dated Sunday, 22 August 1943. It reads:
What a night and what a result. I hardly know how to write. It started last night actually. Reg, poor old chap complained of feeling cold and everything he had was more or less messed and wet because he couldn't control himself. He went into a coma and rambled about eleven. We covered him and made him as comfortable as it was possible. I kept up and kept the fire at the end of the tent going to help warm us and keep the mosquitos etc away. I didn't like the look of him when I went and looked at him about 2.30 so I called the orderlies. We done our very best all night for Reg but I'm sorry to say he passed away about ten past eight this morning. It was approx. ten minutes after the check so he had to lay all day in the tent with us until after the 4 o'clock check. Just a Jap method. I'm just back from carrying him to the cemetery and it's a sort of coincidence but when passing the isolation hospital there was a service on and the hymn 'Abide with me' was just being sung.
Reg had a very few personal things having sold his ring, pen, watch etc but I have his photos and a few letters which I asked permission to be allowed to keep so I may return them to his wife personally.
Another man also passed away out of our party after I got back about ten minutes ago so that makes eight in all we have lost in a fortnight and now it leaves 46.

What struck me when reading Bill Smith's diary was the incredible bravery shown by the prisoners of war. After one year and one month as a prisoner, Bill wrote:
What a life this is but one mustn't grumble I suppose.
I cannot even begin to imagine the conditions those men lived in or the pain that they suffered. Although he begins the diary by counting the weeks and days he has been imprisoned, by the end Lance Corporal Smith is counting the number of his fellow soldiers and friends who had fallen.
Although we must not forget the allied troops and civilians who were imprisoned all over the area in Java, Sumatra, Singapore and Taiwan, Hellfire pass is favoured by many of the veterans and relatives of those imprisoned as a memorial site due to the particular hardship suffered by those who worked there.
The Australian and Thai Governments have co-operated on building a memorial complex at Hellfire pass, but there has been, as yet, no contribution from any British Government. That is despite the fact that more than double the number of British soldiers died there compared with our allies. Although the Government fund the upkeep of the cemeteries, and they are beautifully kept, there is no memorial to honour the sacrifice that those soldiers made for their country.
After the war, the British Government sold the railway to Thailand for £1.5 million. A memorial to the men who lost their lives building it would cost merely a fraction of that amount. Currently, visitors to the site are faced with a plaque that commemorates a great "feat of Japanese engineering", but does not mention the human cost of the project. The Royal British Legion is working to raise funds for a museum that will tell the true story of the far east prisoners of war from all over the area, and which will serve as a tribute to lost comrades and loved ones. It should be a place of meditation and reflection. It would also stand as a reminder of the terrible inhumanity inflicted on those prisoners of war, and ensure, by remembering their sacrifice, that such atrocities are never allowed to happen again.
The memory of these events will not disappear with the last of the veterans. The sons and daughters of the soldiers lost in the far east, like my constituent Mrs. Cooper, have begun their own organisation to ensure that the sacrifice of those men is never forgotten.
On Wednesday 27 October 1943, the day before his and his wife's birthday, Bill Smith wrote:
Up to today there have been 573 deaths in this hospital camp. Well Ida dearest tomorrow is the one day of our lives and I only wish I could send you a little something but I'll make up for it later. It won't be long now.
Just over a month later, Lance Corporal Smith died. He was never able to make up for missing his wife's birthday, but we have a chance to make up to the relatives of men such as Bill Smith for the loss of their loved ones.
I ask that the Government give serious consideration to contributing funds for the building of a memorial museum to the British soldiers who died while imprisoned in the far east. A country can ask no more of its citizens than that they lay down their lives in its defence. Surely those men could expect that country to honour their sacrifice in a way that gives comfort to those loved ones they left behind. Such a memorial would demonstrate the gratitude that this country holds for the men who have fought to defend it.
I want to end with, once again, the words of Lance Corporal William Smith, from a poem written in his diary:
There'll come a Bright Day
When Love and Peace will stay
They will not have died in vain
nor have suffered that great pain
For greater Love hath no man
Who died that his Brother might live.

The Parliamentary Under-Secretary of State for Defence (Mr. John Spellar): I congratulate my hon. Friend the Member for Great Yarmouth (Mr. Wright) on securing this debate and on his choice of subject for his maiden speech. We were pleased to hear his vivid description and interesting historical examples of his home town, which is also his constituency. I suspect that he will be representing its interests for many years to come.
The people in Great Yarmouth, like all of us, are rapidly approaching the millennium with considerable optimism and the cautious expectation that this country will enter the new century during a relatively stable period of world peace.
As my hon. Friend has reminded us, 50 years ago things were vastly different. The United Kingdom had withstood the onslaught of belligerent powers and, with her allies, won through to ultimate victory. But at what cost? Half a century on, it is perhaps too easy to forget the tremendous impact that the second world war had on all aspects of our society, and the suffering that had been endured by so many.
It is right, in these last years of the second millennium, to focus our attention on the veterans of both world wars, but it is equally important for us to remember those who were not so fortunate and who never returned home to their families after the victory. The moving poems and the extracts of the diary read by my hon. Friend brought that home starkly and graphically.
However, some suffered far more than others. One group in particular stands out as having suffered to an extraordinary degree during the second world war. I refer of course to those who were captured in the far east. Many prisoners of war were forced to work in appalling conditions, with inadequate food, medical supplies and shelter. As my hon. Friend has so eloquently reminded us, many died in what is now Thailand, building the Burma-Siam railway: the so-called death railway immortalised in the film "The Bridge on the River Kwai".
I must make it clear at the outset that the nation and the Government have the utmost respect for, and are grateful to, all those who fought and died in the far east during the second world war. Despite the passing of more than half a century, we are all still very much aware of the tremendous hardships endured by the 61,000 British, Australian, Dutch and American prisoners of war, and the Asian labour, who were forced by their captors to build the Burma-Siam railway using the most primitive tools in the most primitive conditions.
However much we may try to understand two generations later, no memorial can ever adequately reflect their suffering, or the debt that we owe those men,

particularly the 13,000, including Lance Corporal Smith, who lost their lives so far away. I assure my hon. Friend that every effort is made to ensure that they are all properly commemorated. In recognition of their sacrifice, the Government will continue to honour their obligation to fund the United Kingdom's contribution to the commemorative work carried out by the Commonwealth War Graves Commission. I thank my hon. Friend for the kind references that he made to the excellent work undertaken by the commission in Thailand and around the world on behalf of our war dead.
As elsewhere throughout the world, the commission does sterling work in the Commonwealth, often in spite of less than perfect conditions, especially climatic conditions. A relevant case in point is their work to maintain more than 15,000 war graves in Thailand, as well as memorials to those who were missing or who died and have no known grave.
The graves of those who died during the construction and maintenance of the Burma-Siam railway—except Americans who were repatriated—have been transferred from the camp burial grounds and many solitary sites along the railway line into three war cemeteries. I apologise to the House if my pronunciation is not accurate. The Kanchanaburi and Chungkai war cemeteries are in Thailand; the third cemetery is at Thanbyuzayat in what was formerly Burma but is now known as Myanmar. Chungkai war cemetery is the original burial ground of one of the prisoners-of-war base camps, and many of the burials are of those who died in hospital. Kanchanaburi war cemetery contains the remains of those who died and were buried along the southern half of the railway from Bangkok to Nieke. Those who died along the northern half are buried at Thanbyuzayat in Burma.
The Government also give assistance to the war widows grant in aid scheme, which is administered by the pilgrimage department of the Royal British Legion. It was introduced in 1985 to provide financial assistance to enable any service widow whose husband was buried overseas between 1914 and 1967 to visit his grave. Since 1967, the practice has changed in that the next of kin of those who died while serving overseas have had the option to have the remains repatriated if they so wished. The grant contributes seven eighths of the cost of a pilgrimage organised by the Royal British Legion pilgrimage department, which has done an excellent job. The remaining eighth of the cost is borne by the widow.
Since its inception in 1985, the scheme has enabled more than 3,000 widows to visit their husbands' graves in some 40 different countries. There have been seven pilgrimages to Thailand during that period, which have enabled 84 widows, who would not otherwise have been able to visit their husbands' last resting place, to pay their final respects. The scheme has been extended three times because of the sheer number of widows who wished to avail themselves of the opportunity to visit war graves throughout the world, and it is due to end on 31 March 1999. I am pleased to say that the Government have allocated £;297,000 to fund the scheme during the last two years of its operation.
I must again stress that we have the greatest sympathy for those men and their families, and we acknowledge the need for remembrance and commemoration, but it has been a long-standing policy of successive Governments of different political persuasion that the cost of memorials


to the dead, both service and civilian, are traditionally erected following a public appeal for private donations. Public funding is not usually made available.
The only exception, where we understand public money was used, is the memorial plaque to those killed in the Falklands war, which was erected in St Paul's cathedral in the mid-1980s. The then Prime Minister expressed the wish that the memorial be funded by the Government. The memorial to those killed in the Gulf war was funded by public subscription, primarily by British expatriates who were resident in Kuwait, which re-established previous practice.
As we all know, war memorials are a familiar part of the landscape of the majority of towns and villages throughout the British Isles. They also stand on many former battlefields and near war cemeteries overseas. They are a firm and lasting testament to the spirit of the nation, and a tangible tribute to those who fell in battle in two world wars and other conflicts. Their value to successive generations is obvious. We must not forget the sufferings of our forebears. The names engraved on the countless monuments here and overseas should force each new generation to think before acting, lest we repeat the errors of the past.
Responsibility for the maintenance of war memorials in the United Kingdom rests with local authorities. The War Memorials (Local Authorities' Powers) Act 1923, as amended by the Local Government Act 1948 and the Parish Councils Act 1957, governs the care of war memorials. Councils are empowered to spend public funds on war memorials from money that is raised through the council tax.
After both world wars, memorials have often been raised overseas by regiments or formations such as divisions in recognition of their fallen comrades. Those memorials are usually located on former battlefields or near the official war cemeteries maintained by the Commonwealth War Graves Commission. Responsibility for funding the maintenance of those memorials rests with individual regiments or formations where they still exist, such as the world war two memorial to the 2nd Division at Kohima in India. For the older first world war memorials, where regiments have been disbanded or the division no longer exists, the British Government have undertaken to fund their maintenance through the commission. That ensures that those commemorated on such monuments of both world wars are not forgotten.
My hon. Friend will understand that the Government and the Ministry of Defence in particular receive many requests from individuals, ex-service men's groups and

charitable organisations for assistance to fund war memorials. It would not be possible, nor would it be fair, to be seen to support one group rather than another. The vast majority have understandable and worthy goals and can make an equally compelling case for support. It could be divisive, and open to criticism from unsuccessful claimants, if the Government were to pick and choose projects to support.
Even in connection with the proposed Hellfire pass memorial, it would appear from recent correspondence that there may be slightly differing views among ex-service organisations as to how best to commemorate the far east prisoners of war. Therefore, the erection of a war memorial may not necessarily be everybody's first or preferred choice.
I should like to mention one further point, which was recently mentioned in the press and was also referred to by my hon. Friend. Following the end of the second world war, the assets of the Burma-Siam railway were indeed sold to the then Siamese Government for £1.25 million. However, the bulk of that sum was used to recompense the identifiable owners of rolling stock, locomotives and rails, which had been removed by the Japanese from Burma, Malaya and the Dutch East Indies. Some £175,000 which remained was added to the reparations of more than £4.5 million which were offered by the Japanese Government, and accepted, in 1951. That fund was subsequently distributed to some 59,000 former prisoners of war and civilian internees through the Department of Health and Social Security and the International Committee of the Red Cross. In addition, some money was distributed to voluntary funds for the general benefit of former Japanese prisoners of war.
We fully appreciate the aims of those seeking support for the memorial at Hellfire pass. I am grateful for this opportunity to wish the organisers every success in their endeavours, and we will be happy to provide representation at any dedication ceremony, should the necessary funding be raised. We will also be more than willing to suggest avenues to explore as part of the fund-raising efforts.
I again congratulate my hon. Friend on raising the case so movingly and effectively, putting his constituency on the map, identifying his constituents' interests and showing how closely he has identified with them.

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes to Eleven o'clock.